Asian stocks fell on Tuesday, mirroring overnight losses on Wall Street as investor sentiment weakened following a recent rally driven by hopes of U.S. interest rate cuts.
Japan’s Nikkei 225 dropped 1.1% to 42,342.28, while Australia’s S&P/ASX 200 slipped 0.3% to 8,949.40. South Korea’s Kospi lost 0.8% to 3,184.70, despite stronger consumer sentiment data suggesting interest rates will likely remain unchanged. Hong Kong’s Hang Seng declined 0.2% to 25,766.68, and the Shanghai Composite edged down 0.1% to 3,878.24.
On Wall Street, the S&P 500 fell 0.4%, the Dow Jones Industrial Average dropped 0.8%, and the Nasdaq shed 0.2%, with healthcare stocks leading the decline. Losses were partly cushioned by gains in technology shares, with Alphabet rising 1.2% and Nvidia gaining 1%.
Bond yields also climbed as markets priced in expectations of a September Federal Reserve rate cut. The 10-year Treasury yield rose to 4.28%, while the two-year yield reached 3.73%. Traders now see an 84% chance of a quarter-point cut at the Fed’s next policy meeting.
Energy markets tracked the downtrend, with U.S. crude slipping to $64.48 a barrel and Brent crude easing to $68.52. In currency trading, the dollar weakened slightly against the yen, falling to 147.31, while the euro strengthened to $1.1644.