Stock market today: Asian shares mostly lower, tracking Wall Street retreat

Shares are mostly lower in Asia after Wall Street benchmarks retreated following the S&P 500's rise to its highest level since the spring of last year

Shares were mostly lower Wednesday in Asia after Wall Street benchmarks retreated following the S&P 500’s rise to its highest level since the spring of last year.

U.S. futures were little changed and oil prices rose.

Tokyo's Nikkei 225 advanced 0.3% to 33,575.14, while the Hang Seng in Hong Kong sank 2% to 19,217.66. The Shanghai Composite index gave up 1.3% to 3,197.90 and the Kospi in Seoul slipped 0.9% to 2,582.63.

In Australia, the S&P/ASX 200 shed 0.6% to 7,314.90. Bangkok's SET lost 0.8% while India's Sensex was up 0.3%.

This week has few potentially market-moving events.

Federal Reserve Chair Jerome Powell will testify before Congress on Wednesday and Thursday. Last week, the Fed held its benchmark lending rate steady, the first time in more than a year that it didn’t announce an increase. But it also warned it could raise rates twice more this year.

The Bank of England will meet on interest-rate policy Thursday. Central banks around the world are heading in diverging directions as they battle inflation amid worries about a pressured global economy.

“Investors are turning cautious ahead of another hefty dose of Fedspeak amidst a relatively light data docket,” Stephen Innes of SPI Asset Management said in a commentary.

He added that “with central banks in the mood to dish out inflation pain these days, investors may need to see some positive inflation data convergence to narrow the wide disparity between the Federal Reserve and the market’s forward inflation expectations before breaking fresh higher ground on U.S. stocks.”

On Tuesday as U.S. markets reopened after being closed in observance of the Juneteenth holiday, the S&P 500 fell 0.5% to 4,388.71. The Dow Jones Industrial Average dropped 0.7% to 34,053.87, and the Nasdaq composite lost 0.2%, to 13,667.29.

The U.S. stock market took a step back following many steps forward on hopes the economy can avoid a recession and inflation is easing enough for the Fed to stop raising interest rates soon. A frenzy around artificial intelligence has also vaulted a select group of tech stocks to huge gains.

Those hopes are battling against worries that the Fed will keep interest rates high for longer, which could grind down the economy. Some of the easiest improvements in year-over-year inflation will soon be passed, bringing tougher times for both the economy and financial markets.

During the 70s, inflation remained high for much longer than hoped, forcing the Fed to ultimately drive the economy into a painful recession.

In China, meanwhile, the world’s second-largest economy is stumbling in its recovery following the relaxation of anti-COVID restrictions

Most of Wall Street fell, with four out of five stocks in the S&P 500 lower.

Worries about the global economy dragged lower prices for crude oil and the stocks of companies that pull it from the ground. Energy stocks fell 2.3% for the largest loss among the 11 sectors that make up the S&P 500. Exxon Mobil fell 2.3%, and Chevron lost 2.3%.

Homebuilders rose after a report showed that U.S. homebuilders broke ground on many more sites last month than economists expected. The number of building permits, an indication of future activity, also accelerated faster than expected.

PulteGroup rose 1.9%, and D.R. Horton gained 1.6%.

In other trading Wednesday, U.S. benchmark crude oil rose 20 cents to $71.39 per barrel in electronic trading on the New York Mercantile Exchange. It gave up 74 cents to $71.19 per barrel on Tuesday.

Brent crude, the international standard, added 16 cents to $76.06 per barrel.

The dollar rose to 142.14 Japanese yen from 141.43 yen. The euro was unchanged at $1.0922.