Asian Markets Rise Despite Wall Street's Tech Stock Slump
Asian markets, excluding Shanghai, saw gains on Monday, defying the negative sentiment on Wall Street after major technology stocks experienced their worst week since the 2020 COVID crash.
Hong Kong's Hang Seng led the region with a 1.8% increase, reaching 16,516.63. Tokyo's Nikkei 225 followed closely, adding 1% to reach 37,438.61. The yen weakened further, with the U.S. dollar rising to 154.76 yen from 154.59 yen, levels not seen since 1990. South Korea's Kospi also jumped 1.3%, reaching 2,626.55.
In contrast, Shanghai's Composite index shed 0.4% to 3,051.76 after the People's Bank of China maintained its 1-year and 5-year loan prime rates.
Wall Street's Tech Woes Continue
On Friday, the S&P 500 dropped 0.9%, marking its third consecutive losing week. It closed at 4,967.23, 5.5% below its record high set late last month. This is the longest losing streak for the index since September, before its record-breaking rally.
The Dow Jones Industrial Average rose 0.6% to 37,986.40, while the Nasdaq composite fell 2% to 15,282.01.
Several top-performing tech stocks experienced significant losses. Super Micro Computer plummeted 23.1%, while Nvidia, another recent high-flyer, dropped 10%. These declines contributed to the S&P 500's tech sector losing 7.3% for the week, its worst performance since March 2020.
Interest Rate Concerns Weigh on Markets
The market's downturn is partly attributed to growing concerns that interest rates may remain high for an extended period. Top Fed officials indicated this week that they might hold rates at their current high level for a while, contradicting earlier signals of potential rate cuts this year.
High interest rates negatively impact various investments, particularly those considered expensive or requiring long-term growth, making tech stocks vulnerable.
Mixed Performance in Other Sectors
Despite the tech sector's struggles, some companies in other sectors reported positive results. American Express rose 6.2% after exceeding analysts' profit expectations for the latest quarter. Fifth Third Bancorp also saw a 5.9% increase following similar performance.
In the oil market, U.S. benchmark crude oil shed 92 cents to $81.30 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude gave up 95 cents to $86.35 per barrel.