Asian shares were mixed on Thursday as Wall Street’s recent rally lost momentum amid discouraging signals from the U.S. economy.
Japan’s Nikkei 225 dipped 0.2% to 37,658.46, while Australia’s S&P/ASX 200 slipped nearly 0.1% to 8,535.10. South Korea’s Kospi, however, jumped 2.1% to 2,829.48 following the inauguration of liberal leader Lee Jae-myung as president. He pledged to revive dialogue with North Korea and strengthen trilateral ties with the U.S. and Japan.
Hong Kong’s Hang Seng Index rose 0.9% to 23,856.54, while China’s Shanghai Composite edged down less than 0.1% to 3,374.30.
U.S. markets offered little direction. The S&P 500 closed nearly flat at 5,970.81, staying 2.8% below its record high. The Dow Jones Industrial Average slipped 0.2% to 42,427.74, while the Nasdaq gained 0.3% to 19,460.49.
More pronounced moves were seen in the bond market, where Treasury yields declined sharply following two weaker-than-expected economic reports. One report showed a contraction in U.S. service industries last month, surprising economists who had expected modest growth. Another from ADP indicated a slowdown in private-sector hiring, raising concerns ahead of Friday’s critical Labor Department jobs report.
These data points fueled speculation that the Federal Reserve may have to cut interest rates later this year to support the economy. The ADP data also prompted former President Donald Trump to pressure Fed Chair Jerome Powell on social media, urging him to reduce rates quickly.
“‘Too Late’ Powell must now LOWER THE RATE,” Trump posted on Truth Social. “He is unbelievable!!!”
The Fed, which has not cut rates in 2025 after a series of reductions through late 2024, is being cautious as it assesses the economic impact of Trump’s tariffs, which could also fuel inflation if paired with rate cuts.
Meanwhile, Treasury yields have been climbing in recent weeks due to broader concerns, including mounting U.S. debt levels as lawmakers debate potential tax cuts. On Wednesday, the yield on the 10-year Treasury dropped to 4.35% from 4.46%, while the 2-year yield, closely tied to Fed rate expectations, declined to 3.86% from 3.96%.
In commodities, U.S. crude oil slipped 8 cents to $62.77 per barrel, while Brent crude rose 1 cent to $64.87. In currency trading, the U.S. dollar rose slightly to 142.87 Japanese yen, while the euro was little changed at $1.1413.
