The majority of Wall Street stocks fell on Monday (1/4) after the latest inflation data sparked concerns about US monetary policy. The Dow Jones Industrial Average and S&P 500 indexes closed lower, while the Nasdaq Composite managed to stay in the green.
US manufacturing data from the Institute for Supply Management (ISM) showed increased activity in March, but a 3.3% rise in the ISM price index compared to February sparked concerns of rising inflation.
Japan.
“The market reversed course after the ISM data was released this morning,” said Jack Ablin of Cresset Capital. “This is one of the indicators that inflation is likely to continue rising.”
Investors are watching the inflation data to gauge possible changes in the Fed’s monetary policy. The Fed previously forecast three rate cuts this year, but that plan could change if inflation remains high. US Treasury yields jumped after the ISM data was released.
Asia Pacific Markets Mixed
In Asia, the Seoul, Singapore, and Manila stock exchanges advanced, while Taipei and Jakarta declined. Hong Kong, Sydney, Wellington, London, Paris and Frankfurt were closed on Easter Monday.
Gold hit a record high of US$2,265.73 an ounce, extending this year’s rally fueled by central banks easing credit conditions and its appeal as a safe-haven asset amid rising geopolitical tensions.
Shanghai Surges, Tokyo Slumps
The Shanghai stock exchange jumped about one percent after data showed Chinese manufacturing grew for the first time in half a year. The 50.8 reading in March represented the first expansion since September and was well above forecasts.
On the other hand, the Tokyo stock exchange slumped more than one percent after a Tankan survey showed a decline in confidence among Japan’s largest manufacturers in the first quarter.
