Asian stocks fell on Tuesday after a report showed the U.S. manufacturing sector contracted in May, the latest sign of a slowing economy.
Oil prices fell and US futures rose slightly.
India’s Sensex index led the region’s losses, plunging 4.1% to 73,496.24 vote count The six-week national election appeared to show fewer seats than expected for outgoing Prime Minister Narendra Modi’s party, although his National Democratic Alliance was comfortably ahead of its nearest rival.
Japan’s Nikkei 225 index lost 0.2% to 38,837.46 and Seoul’s Kospi fell 0.8% to 2,660.69. Hong Kong’s Hang Seng was the outlier, gaining 0.5% to 18,494.28, while the Shanghai Composite Index edged down 0.1% to 3,076.96.
Australia’s S&P/ASX 200 lost 03% to 7,740.80. Taiwan’s Taiex lost 0.8%.
On Monday, U.S. stocks drifted to a mixed finish.
The S&P 500 edged up 0.1%, to 5,283.40, even as the majority of stocks in the index fell. The Dow Jones Industrial Average fell 0.3% to 38,571.03 and the Nasdaq composite rose 0.6% to 16,828.67.
Treasury yields also fell in the bond market after the Institute for Supply Management report showed the U.S. manufacturing sector declined in May for the 18th time in 19 months. The manufacturing sector has been particularly hard hit by high interest rates intended to tame high inflation. This may also affect Asian economies that rely on exports.
Analysts questioned the significance of the report, given that the indicator has been declining for most of the past two years.
“So why such a wave of American pessimism this time? Was this a fabricated excuse to take profits? Or is there a deeper source of concern under the hood? Tan Jing Yi of Mizuho Bank said in a comment. “We suspect it’s a little bit of both.”
The 10-year Treasury yield fell to 4.39% from 4.50% Friday evening.
This week, several other high-profile economic reports could cause additional swings in yields.
On Tuesday, the US government will report the number of job openings announced by employers at the end of April. And on Friday, he will give the latest monthly update on overall job growth and worker wages.
Shares of companies whose profits are most closely tied to the strength of the economy have fallen to the market’s worst losses. This includes the oil and gas industry, as the price of crude has fallen on concerns about weaker growth in fuel demand.
Halliburton fell 5.3% and Exxon Mobil fell 2.4%. They sank when the price of a barrel of American oil fell by 3.5%. Brent crude, the international standard, lost a similar amount despite weekend moves Saudi Arabia and other oil producing countries intended to support its price.
On the winning side are a few big tech stocks that continue to grow regardless of how the economy is doing.
Nvidia climbed another 4.9% to bring its gain for this year to 132.2% after unveiling new products and services over the weekend. It was delivered dazzling profits to keep at bay criticism that investors have become overzealous about the prospects of AI. Nvidia has been by far the most powerful force pushing the S&P 500 higher.
The jump was even greater in another corner of Wall Street, well accustomed to the up and down fluctuations that make your stomach ache.
Stoppage of play climbed 21% in a move reminiscent of its rocket ride early 2021 that shook Wall Street and introduced the term “meme stock” into the language of our times. GameStop surged after a Reddit account associated with a central character in the 2021 episode said it had built up a stake of 5 million shares, along with options to buy more. The post on Sunday evening indicated that the position was worth $181.4 million.
In other trading Tuesday morning, U.S. benchmark crude oil lost 85 cents to $73.37 a barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, the international standard, fell 77 cents to $77.59 a barrel.
The US dollar fell from 156.10 Japanese yen to 156.13 Japanese yen. The euro rose from $1.0904 to $1.0902.
