Stock market today: Wall Street slips as stocks slump worldwide

Asian benchmarks were mostly higher Thursday after the United States House of Representatives approved a debt ceiling and budget cuts package, avoiding a default crisis.

© (Ahn Young-joon / Associated Press)
A currency trader watches monitors in front of screens showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Thursday, June 1, 2023. Asian benchmarks were mostly higher Thursday after the U.S. House of Representatives approved a debt ceiling and budget cuts package, avoiding a default crisis. (AP Photo/Ahn Young-joon) ((Ahn Young-joon / Associated Press))

But the enthusiasm was muted by worries about the Chinese economy after disappointing recent data on a recovery in the world’s second largest economy, and a key driver of regional growth.

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“Following recent disappointing economic data from China, the real economy levered stocks are likely to underperform. If economic data from China continues to miss expectations, more participants could start to forecast a lower China GDP for the quarters ahead,” Anderson Alves at ActivTrades said.

Japan’s benchmark Nikkei 225 rose 0.3% in morning trading to 30,976.43. Australia’s S&P/ASX 200 gained 0.3% to 7,109.40. South Korea’s Kospi quickly lost early gains to dip 0.4% to 2,567.86. Hong Kong’s Hang Seng jumped 0.8% to 18,381.63, while the Shanghai Composite added 0.4% to 3,216.86.

If the debt deal also passes in the Senate, government checks will continue to go out to Social Security recipients, veterans and others and would prevent financial upheaval at home and abroad, ahead of the Monday deadline when the Treasury has said the U.S. would run out of money to pay its debts.

Wall Street slipped as stocks slumped worldwide Wednesday on worries about the strength of the global economy and inflation.

The S&P 500 fell 25.69, or 0.6%, to 4,179.83. The Dow Jones Industrial Average dropped 134.51, or 0.4%, to 32,908.27, and the Nasdaq composite lost 82.14, or 0.6%, to 12,935.29.

Wall Street has been able to hold up pretty well recently, largely because of gains for a handful of tech companies and others getting swept up in the buzz around artificial intelligence. The S&P 500 managed to close out May with a modest gain.

But some of the air seeped out of those big winners Wednesday. Nvidia, whose chips are helping to power the surge into AI, dropped 5.7% for its first fall since it gave a monster forecast last week for upcoming sales.

Wall Street stocks pared their losses in the afternoon after a Federal Reserve official hinted the central bank may hold rates steady at its next meeting in two weeks.

“Indeed, skipping a rate hike at a coming meeting would allow the Committee to see more data before making decisions about the extent of additional policy firming,” Fed Gov. Philip Jefferson said in a speech.

But he said the Fed could still raise rates again at a later meeting.

Worries have been rising about an economic slowdown under the weight of much higher interest rates. The Federal Reserve has raised rates at a furious pace since early 2022 in hopes of getting inflation under control. But high rates work by hurting the economy and hitting prices for investments.

“We see this as a race for weakness between inflation and economic activity,” said Tony Roth, chief investment officer at Wilmington Trust.

Either inflation needs to break lower to return to the Fed’s target, which would allow it to go easier on interest rates, or the economy will fall into recession. Roth said both the economy and inflation have remained strong for longer than he expected: “It’s a very slow race to the bottom.”

Other, smaller portions of the economy have shown much more pain in the face of higher rates. A report Wednesday morning suggested manufacturing in the Chicago region is contracting by much more than economists feared.

In the bond market, the yield on the 10-year Treasury fell to 3.62% from 3.70% late Tuesday. It helps set rates for mortgages and other important loans that influence the housing and other markets.

The two-year yield, which moves more on expectations for Fed action, fell to 4.39% from 4.46%.

In energy trading, benchmark U.S. crude rose 37 cents to $68.46 a barrel. Brent crude, the international standard, fell 88 cents to $72.66 a barrel.

In currency trading, the U.S. dollar edged up to 139.41 Japanese yen from 139.29 yen. The euro stood unchanged at $1.0692.


AP Business Writer Stan Choe contributed from New York.


Yuri Kageyama is on Twitter

This story originally appeared in San Diego Union-Tribune.

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