Asian stocks ended mixed on Thursday as investors reacted to two disappointing economic reports from the United States. The recent strong rally on Wall Street lost momentum, and U.S. futures slipped slightly. Oil prices also declined.
Japan’s Nikkei 225 dropped 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. The gain came after new President Lee Jae-myung took office. He pledged to restart dialogue with North Korea and to build stronger ties with the United States and Japan.
In Hong Kong, the Hang Seng Index rose 0.9% to 23,856.54. Mainland China’s Shanghai Composite dipped slightly by less than 0.1% to 3,374.30.
U.S. Stocks Mixed; Bond Yields Slide
On Wednesday, U.S. stocks were mixed. The S&P 500 was nearly flat, closing at 5,970.81—still 2.8% below its record high. The Dow Jones Industrial Average fell 0.2% to 42,427.74. The Nasdaq Composite rose 0.3% to 19,460.49.
Bond prices rose, sending yields lower. The drop in yields came after reports showed signs of weakness in the U.S. economy.
Service Sector Slows; Job Growth Disappoints
Two reports sparked investor concern. First, a survey by the Institute for Supply Management (ISM) found that activity in the U.S. services sector shrank in the past month. Economists had expected growth.
Businesses blamed tariffs for increasing uncertainty. Many said it has become harder to predict and plan for the future.
Second, data from payroll provider ADP showed that private employers added fewer jobs than expected. This report raises concerns about the official U.S. jobs report due Friday. That data is one of the most closely watched indicators on Wall Street.
Trump Urges Fed to Cut Rates Faster
After the weak job data, markets priced in higher chances of a rate cut from the Federal Reserve later this year. Lower rates can help support the economy, and traders are now betting that cuts will come sooner.
Former President Donald Trump reacted quickly on his “Truth Social” platform, urging Fed Chair Jerome Powell to act.
“It’s ‘too late,’ Powell has to cut rates now,” Trump wrote. “He’s incredible!!!”
Although the Fed has signaled plans to cut interest rates by the end of 2024, no cuts have been made yet this year. Officials say they want to understand how Trump’s new tariffs will affect inflation and economic growth.
Concerns Rise Over U.S. Debt and Treasury Yields
Another concern for investors is the growing U.S. government debt. As Congress debates further tax cuts, investors are demanding higher interest rates on government bonds. They want to be compensated for the risk that federal debt could increase sharply.
This has pushed long-term Treasury yields higher in recent weeks, beyond the Fed’s control.
Still, yields fell sharply on Wednesday. The 10-year Treasury yield dropped to 4.35% from 4.46%. The two-year yield, which closely reflects interest rate expectations, fell to 3.86% from 3.96%.
Oil Prices Dip, Dollar Steady
Oil prices moved slightly lower in early Thursday trading. U.S. crude slipped 8 cents to $62.77 a barrel. Brent crude, the international benchmark, added 1 cent to reach $64.87 a barrel.
In currency markets, the dollar rose to 142.87 yen from 142.78. The euro stayed mostly unchanged at $1.1413, compared to $1.1418 the day before.
