Asian Stocks Fall, U.S. Markets End Worst Month Since September
Asian stocks fell on Wednesday, with most markets in the region closed for a holiday. The Nikkei 225 in Tokyo lost 0.4%, while the S&P/ASX 200 in Australia dipped 1.1%.
Meanwhile, U.S. stocks closed out their worst month since September. The S&P 500 tumbled 1.6% on Tuesday, its first losing month in six. The Dow Jones Industrial Average dropped 1.5%, and the Nasdaq composite lost 2%.
The decline in U.S. stocks was driven by concerns about inflation and rising interest rates. A report showed that U.S. workers won bigger gains in wages and benefits than expected during the first three months of the year. This fueled worries that upward pressure on inflation will continue, leading to further interest rate hikes by the Federal Reserve.
The earnings reporting season has been largely positive so far, with many companies exceeding analysts' expectations. However, some individual companies saw their stocks fall despite strong results. GE Healthcare Technologies tumbled 14.3% after reporting weaker results and revenue than analysts expected. F5 dropped 9.2% despite reporting a better profit than expected. McDonald's slipped 0.2% after its profit for the latest quarter came up just shy of analysts' expectations.
Helping to keep the market's losses in check was 3M, which rose 4.7% after reporting stronger results and revenue than forecast. Eli Lilly climbed 6% after turning in a better profit than expected on strong sales of its Mounjaro and Zepbound drugs for diabetes and obesity. It also raised its forecasts for revenue and profit for the full year.
Stocks of cannabis companies also soared after The Associated Press reported that the U.S. Drug Enforcement Administration will move to reclassify marijuana as a less-dangerous drug in a historic shift. Cannabis producer Tilray Brands jumped 39.5%.
In the bond market, the yield on the 10-year Treasury rose to 4.69% Wednesday from 4.61%. Benchmark U.S. crude fell 75 cents to $81.18 a barrel. Brent crude, the international standard, lost 65 cents to $85.68 a barrel. In currency trading, the euro cost $1.0655, down from $1.0663.
The Federal Reserve is scheduled to announce its decision on interest rates on Wednesday afternoon. No one expects the Fed to change its main interest rate at this meeting, but traders are anxious about what Fed Chair Jerome Powell may say about the rest of the year.