(Technical Analysis) Asian Markets Dip Amid Mixed Performance on Wall Street

Asian stocks mostly declined on Wednesday, following a mixed performance on Wall Street. Investors are keeping an eye on the U.S. presidential race, particularly the debate between Vice President Kamala Harris and former President Donald Trump. The prospect of Trump’s re-election has historically led to fluctuations in the value of the U.S. dollar, as his trade policies, such as tariffs, have influenced the market.

Asian Market Movements

• Japan’s Nikkei 225 dropped 0.8% to 35,867.33.
• Australia’s S&P/ASX 200 fell 0.3%, closing at 7,989.90.
• South Korea’s Kospi lost 0.2% to 2,517.44, despite a drop in the country’s unemployment rate to 2.4%, the lowest in a year.
• Hong Kong’s Hang Seng slipped 1.5% to 16,984.02.
• Shanghai Composite was down 0.8%, settling at 2,719.73.

Wall Street Recap

On Tuesday, the S&P 500 rose 0.4%, moving closer to its July record. The index fluctuated between small gains and losses, showing more stability compared to recent volatility driven by concerns about the slowing U.S. economy. Investors are also focused on potential interest rate cuts by the Federal Reserve, hoping to stave off a recession.

• S&P 500 closed 0.4% higher at 5,495.52.
• Dow Jones fell by 92.63 points, or 0.2%, closing at 40,736.96.
• Nasdaq composite gained 0.8%, ending at 17,025.88.

Tech stocks helped lift the Nasdaq, while banks weighed down the Dow after disappointing comments from industry leaders at a conference.

Bond Market and Treasury Yields

In the bond market, yields on U.S. Treasuries eased ahead of the Federal Reserve’s upcoming meeting, where an interest rate cut is widely expected. The yield on the 10-year Treasury dropped from 3.70% to 3.64%.

The market anticipates the Fed’s first rate cut since the pandemic, shifting its focus from inflation to protecting the economy. Reports due this week on U.S. inflation will likely influence the scale of these cuts. Analysts expect inflation to have slowed to 2.6% in August, down from 2.9% in July.

Energy Markets

In the energy sector, U.S. crude prices rose by 46 cents to $66.21 a barrel, while Brent crude, the global benchmark, increased by 43 cents to $69.62 a barrel, hovering near its lowest levels since 2021.