Stocks rose mostly in Asia on Thursday after a volatile day of trading led to modest gains on Wall Street.
US futures edged higher amid mixed oil prices.
Shanghai’s benchmark dropped 1% to 3,204.93 after China’s central bank kept its benchmark lending rate unchanged. Other major economies are raising interest rates to keep inflation in check, but China’s economy is slowing and inflation remains moderate.
Tokyo’s Nikkei 225 index rose 0.5% to 27,946.20. Japan reported her August record trade deficit. This is due to the high cost of importing energy and other commodities and the weaker yen.
However, analysts say they expect a rebalancing in the coming months.
“Auto production should continue to normalize as supply chain disruptions ease, but commodity price growth will slow further,” said Darren Tay of Capital Economics.
Hong Kong’s Hang Seng Index rose 0.5% to 18,941.04 while Seoul’s Kospi rose 0.1% to 2,413.07.
Australia’s S&P/ASX 200 was up 0.6% to 6,869.60.
Trading was temporary in New York on Wednesday, the day after the market recorded its worst drop in two years.
Inflation reports at the wholesale level show that even if overall inflation has slowed, prices are still rising rapidly and pressures are building beneath the surface. That echoed Tuesday’s report on inflation at the consumer level, which raised expectations of a rate hike and sparked a runaway market.
The S&P 500 rose 0.3% to 3,946.01 on Wednesday while the Dow rose 0.1% to 31,135.09. The Nasdaq rose 0.7% at 11,719.68 and the Russell 2000 closed 0.4% higher at 1,838.46.
Traders see a one-in-four chance that the Fed will raise the benchmark rate by 1 percentage point next week, four times its normal rate, according to CME Group. The day before, it was him close to a one-third chance. The site says the odds of a three-quarter percentage point increase from 69% on Tuesday have now increased to 76%.
The central bank has already raised the benchmark rate four times this year, with the last two raisings by three-quarters of a percentage point.
The Federal Reserve (Fed) is taking aggressive action on interest rates to cool the highest inflation in 40 years. Tuesday’s report on higher prices rocked the market, showing signs that inflation is entering a more stubborn phase.
Wall Street is particularly concerned about the possibility of raising interest rates too far, slowing the economy and pushing it into a recession. The Federal Reserve is trying to avoid that outcome, but the latest inflation report suggests it’s becoming a tougher task.
The US economy has generally slowed, but consumers have remained resilient and the job market remains strong. Wall Street will get another update on inflation’s latest impact on spending when the government releases his August retail sales report on Thursday.
Markets are also watching U.S.-China tensions and the war in Ukraine, with business and government officials warning of a possible nationwide rail strike this weekend that could cripple an already dismantled supply chain. I am ready for sex.
The railroad has already started cutting shipments of hazardous materials and has announced plans to stop carrying refrigerated products before the strike deadline on Friday. Norfolk Southern, Union Pacific, BNSF, CSX, Kansas City Southern, and other companies that rely on rail to deliver raw materials and finished goods are assuming the worst.
Union Pacific fell 3.7% and Norfolk Southern fell 2.2%.
Biden administration officials are scrambling to develop plans to keep supplies moving even if railroads are shut. The White House is also pressuring both sides to resolve their differences. And a growing number of business groups are lobbying Congress to step in and prevent a strike if no deal can be reached.
In other trading on Thursday, US benchmark crude rose 10 cents to $88.58 a barrel in electronic trading on the New York Mercantile Exchange. On Wednesday he surged $1.17 to $88.48.
Brent crude, the price benchmark for international trading, dropped five cents to $94.05 a barrel.
The dollar rose to 143.42 yen from 143.16 yen at the end of Wednesday. The euro fell from 99.77 cents to 99.73 cents.
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