Asian stocks declined after Federal Reserve officials indicated that high interest rates might persist, despite initial signs of easing inflation.
On Wednesday, data revealed a deceleration in US consumer price inflation, leading markets to quickly anticipate at least two interest rate reductions this year.
However, enthusiasm waned following a report that showed a still robust labour market and ongoing caution from central bankers about inflationary pressures.
The MSCI broad index of Asia-Pacific shares outside Japan dropped 0.4% after reaching a two-year peak on Thursday. Despite the dip, the index is on track for a 2% weekly increase, marking its fourth consecutive week of gains.
Japan’s Nikkei fell 0.3%, while China’s blue-chip stocks declined by 0.2%.
Hong Kong’s Hang Seng Index was a notable exception, reaching its highest level since August 2022 and last reported up by 0.3%.
In the US, the Dow Jones Industrial Average broke the 40,000 mark for the first time on Thursday, climbing as high as 40,051.05, with the S&P 500 and Nasdaq also achieving record highs before receding slightly by the end of trading.
Ultimately, the Dow Jones Industrial Average dropped 0.1% to 39,869.38, the S&P 500 declined by 0.2% to 5,297.12, and the Nasdaq Composite decreased by 0.3% to 16,698.32.
Yields on 10-year Treasury notes increased slightly to 4.38% from 4.35% the previous day.
