Stock Market Today: Asian stocks fall after Wall Street reports its worst week in the last 10 days

HONG KONG – Major Asian stock markets fell on Monday after Wall Street posted its worst week since Halloween.

US futures fell even after congressional leaders reached an agreement on overall spending levels for the current fiscal year that could help avoid a partial government shutdown later this month.

Oil prices fell after Saudi Arabia on Sunday reduced oil prices for Asian markets to their lowest level in 27 months.

Hong Kong’s Hang Seng Index fell 1.9% to 16,187.00, led by technology stocks, which fell 2.4%. The Shanghai Composite Index fell 1.2% to 2,894.58 points.

China announced on Sunday the imposition of sanctions on five US defense-related companies in response to US arms sales to Taiwan and US sanctions on Chinese companies and individuals. The announcement came less than a week before Taiwan’s presidential election centered on the self-governing island’s relationship with China, which it claims as its territory.

In South Korea, the Kospi fell 0.2% to 2,572.41, and Australia’s S&P/ASX 200 lost 0.5% to 7,453.40.

Taiwan’s Taiex rose 0.5%, while Bangkok’s SET fell 0.5%.

Markets in Japan were closed for holiday.

Investors await inflation reports later this week from Japan, the United States and China.

On Friday on Wall Street, the S&P 500 rose 0.2% to 4,697.24 after drifting between small gains and losses during the day. It capped the index’s first losing week in the last 10 days, after launching into 2024 on hopes that inflation and the overall economy would cool enough for the Federal Reserve to cut interest rates sharply within the year.

The Dow Jones Industrial Average rose 0.1% to 37,466.11, and the Nasdaq Composite added 0.1% to 14,524.07.

Treasury yields swung sharply in the bond market after the economic reports. They initially rose after the latest monthly jobs report showed that US employers unexpectedly accelerated their hiring pace last month. Average hourly wages for workers also rose, when economists had expected them to decline.

These strong numbers are good news for workers and should keep the economy active. This is positive for corporate earnings, which is one of the main factors that determine stock prices.

But what worries Wall Street is that strong data could also convince the Fed that upward pressure remains on inflation. This, in turn, could mean that the Fed will keep interest rates high for longer than expected. Interest rates affect the other big factor that determines stock prices, as high interest rates hurt financial markets.

The jobs report briefly forced traders to publish their expectations for when the Federal Reserve could start cutting interest rates. But another report released on Friday showed that growth for finance, real estate and other companies in US service industries slowed more than economists expected last month.

Overall, the data could boost Wall Street’s hopes for a perfect landing for the economy, one slowed enough by higher interest rates to eliminate high inflation but not so much that it leads to a recession.

After rising to a high of 4.09% immediately after the jobs report, the 10-year Treasury yield fell to 3.96% after the weaker-than-expected report on services industries. It eventually pulled back to 4.04%, compared to 4.00% late Thursday.

On Wall Street, Constellation Brands rose 2.1% after the US seller of Corona and Modelo beer reported stronger fourth-quarter earnings than analysts expected.

On the losing end was Apple, which fell 0.4% on Friday resulting in a 5.9% loss for the week, its worst since September. It’s a sharp turnaround from last year, when the market’s most influential stocks rose more than 48%.

In other trading, the price of US crude oil fell 83 cents to $72.98 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, lost 87 cents to $77.89 a barrel.

The US dollar fell to 144.49 Japanese yen from 144.59 yen. The euro fell to $1.0933 from $1.0945 late Friday.