Asian shares retreated Friday after rising bond market yields once again weighed on Wall Street, ending a lull in wider swings in prices during a brief respite from market moving data releases.
U.S. futures edged higher and oil prices also advanced.
Investors in Asia are facing steady declines following a warning by U.S. Federal Reserve Chair Jerome Powell that interest rates, already at their highest level in more than two decades, might need to climb further. Benchmarks dropped more than 1% in Hong Kong and South Korea.
The Hang Seng in Hong Kong dropped 1.7% to 17,211.76 and the Shanghai Composite index slipped 0.6% to 3,033.73.
A financial services business of China’s biggest bank, ICBC, said it was it by a ransomware attack that reportedly disrupted trading in the U.S. Treasury market.
New York-based Industrial and Commercial Bank of China Financial Services handles trades and other services for financial institutions. It said it had isolated affected systems and that trades had cleared by Thursday. It was unclear how much of an impact the attack had on Treasury market trading.
Australia’s S&P/ASX 200 fell 0.6% to 6,976.50. Tokyo’s Nikkei 225 index dropped 0.4% to 32,533.12. Taiwan’s Taiex lost 0.4%, and the SET in Bangkok dropped 0.6%.
On Thursday, one of Wall Street’s longest winning streaks in two decades came to an end as the S&P 500 sank 0.8%, closing at 4,347.35. The Dow Jones Industrial Average dropped 0.6% to 33,891.94 and the Nasdaq composite lost 0.9%, to 13,521.45.
Stocks had been higher earlier Thursday with the S&P 500 expected to reach its longest winning streak in 19 years. But it quickly sagged as Treasury yields rose following a report that suggested the U.S. job market remains remarkably solid. It climbed further when the U.S. government announced the results of a sale of $24 billion in Treasury bonds and spurted still higher after Federal Reserve Chair Jerome Powell said the Fed “will not hesitate” to raise interest rates further if it feels high inflation is not fully under control.
The 10-year Treasury yield rose to 4.62% early Friday from 4.50% late Wednesday.
High rates and yields have been the main driver for the stock market for months because they hurt prices for investments, slow the economy and raise the pressure on the financial system.
A swift rise in the 10-year yield that began in the summer earlier knocked the S&P 500 down by 10% from its peak for the year. The yield briefly topped 5% to reach its highest level since 2007, as it caught up with the Federal Reserve’s main interest rate, which is above 5.25% and at its highest level since 2001.
The worries about rates overshadowed some more profit reports from big U.S. companies for the summer that came in better than expected.
The Walt Disney Co. rose 6.9% after saying it added more Disney+ streaming subscribers than Wall Street had forecast, while also increasing its target for annual cost savings.
Tapestry climbed 3% for another one of the bigger gains in the S&P 500 after the maker of high-end shoes and handbags beat Wall Street’s profit forecast
On the opposite end was Becton Dickinson, which sank 9.3%. The maker of medical equipment reported profit for the summer that matched Wall Street’s expectations, but its financial forecasts for its upcoming fiscal year fell short of some analysts’ estimates.
Topgolf Callaway Brands was another weight on the market and sank 16.9% despite beating analysts’ expectations for profit during the summer. It cut its forecasts for full-year revenue and profit, in part because of weakening trends at its Topgolf entertainment venues outside of newly opened ones.
In the oil market, crude prices regained a bit of their big losses from earlier in the week.
A barrel of benchmark U.S. crude added 35 cents to $76.09 in electronic trading on the New York Mercantile Exchange. It rose 41 cents to settle at $75.74 a barrel on Thursday. Brent crude, the international standard, gained 36 cents to $80.37 a barrel.
The U.S. dollar rose to 151.39 Japanese yen from 151.34 yen. The euro was unchanged at $1.0669.
