Shares were mixed in Asia on Monday while U.S. futures fell ahead of the July 4 holiday in the U.S.
Benchmarks rose in Tokyo, Shanghai and Sydney but fell in Hong Kong and Seoul. Oil prices were steady after surging on Friday.
Last week was the fourth losing week in the last five for Wall Street as investors fret over high inflation and the possibility that higher interest rates could bring on a recession.
The most optimistic scenario, a “Goldilocks outcome," would bring a slowdown significant enough to cool inflation running at its highest level in four decades but not so strong as to result in a “hard landing," Mizuho Bank said in a commentary.
“This is a tall order that is far from guaranteed at this point," it said, noting that markets will be looking to comments in minutes from the last Federal Reserve policy meeting, expected Wednesday.
Economic data over the last few weeks has shown that inflation remains hot and the economy is slowing. The latter has raised hopes on Wall Street that the Fed will eventually ease off its push to raise rates, which have been weighing on stocks, especially pricier sectors like technology.
Analysts don’t expect much of a rally for stocks until there are solid signs that inflation is cooling, and the latest data has yet to show that. Friday brought a report that Inflation in countries using the euro had set another eye-watering record, pushed higher by a huge increase in energy costs fueled partly by Russia’s war in Ukraine.
Annual inflation in the eurozone’s 19 countries hit 8.6% in June, surging past the 8.1% recorded in May, according to the latest numbers published Friday by the European Union statistics agency, Eurostat. Inflation is at its highest level since recordkeeping for the euro began in 1997.
Tokyo's Nikkei 225 rose 0.6% to 26,106.29 on Monday while the Shanghai Composite index edged 0.1% higher, to 3,392.22. Australia's S&P/ASX 200 climbed 1.2% to 6,616.30.
Hong Kong's Hang Seng index lost 0.6% to 21,726.39 and the Kospi in Seoul declined 0.6% to 2,292.07. Shares edged lower in Bangkok and fell in India and Taiwan.
On Friday, the S&P 500 rose 1.1%, recovering from early losses to close at 3,825.33. The gain snapped a four-day losing streak for the benchmark index, which still posted its fourth losing week in the last five.
The Dow Jones Industrial Average rose 1% to 31,097.26, while the tech-heavy Nasdaq gained 0.9% to 11,127.85.
The S&P 500 closed out its worst quarter since the onset of the pandemic in early 2020. Its performance in the first half of 2022 was the worst since the first six months of 1970. It has been in a bear market since last month, meaning an extended decline of 20% or more from its most recent peak.
The yield on the 10-year Treasury, which helps set mortgage rates, was steady at 2.89% after falling Friday from Thursday's 2.97%.
Financial markets in the U.S. will be closed on Monday for Independence Day.
Wall Street remains concerned about the risk of a recession as economic growth slows and the Federal Reserve aggressively hikes interest rates. The Fed is raising rates to purposefully slow economic growth to help cool inflation, but could potentially go too far and bring on a recession.
The latest economic update on Friday for the manufacturing sector showed a slowdown in growth that was sharper in June than economists expected. That followed a worrisome report showing consumer confidence slipped to its lowest level in 16 months. Also, the U.S. economy shrank at an annual rate of 1.6% in the first quarter, partly due to weak consumer spending.
High gas prices have been big factor in pushing prices higher and squeezing pocketbooks.
On Monday, benchmark U.S. crude oil lost 12 cents to 108.31 per barrel in electronic trading on the New York Mercantile Exchange. It jumped $2.67 to $108.43 per barrel on Friday.
Brent crude, the pricing basis for international trading, gave up 5 cents to $111.55 per barrel.
The U.S. dollar slipped to 135.17 Japanese yen from 135.27 yen. The euro declined to $1.0426 from $1.0429.
