Asian markets had mixed results on Wednesday following a quiet day on Wall Street with no notable market-moving data. China saw its exports decrease by 7.5% year-on-year in May, with imports falling by 4.5%. This slump indicates signs of a slowing economic recovery since lifting its anti-virus measures in December, causing disruption in travel and commerce. The decrease in exports was the first year-on-year drop in three months. The Nikkei 225 index in Tokyo saw its sharpest decline in 12 weeks, losing 1.8% to 31,913.74, as investors sold to lock in recent gains. The Shanghai Composite index fell 0.1% to 3,192.41, while the Hang Seng in Hong Kong gained 0.7% to 19,232.94. Meanwhile, the Kospi remained almost unchanged in Seoul at 2,615.60, and Australia’s S&P/ASX 200 decreased 0.2% to 7,118.00. Although shares rose in Taiwan, they fell in Bangkok.
On Tuesday, the S&P 500 rose 0.2% to 4,283.85, coming close to finishing 20% above mid-October levels, while the Dow Jones Industrial Average edged up by less than 0.1% to 33,573.28 and the Nasdaq composite went up by 0.4% to 13,276.42. Cryptocurrency dominated the market, with the Securities and Exchange Commission (SEC) accusing Coinbase of disregarding its financial platform’s registration of a national securities exchange, broker and clearing agency. Coinbase Global’s stock dropped by 12.1% on the Nasdaq after the SEC’s accusations. Similarly, Binance, a major crypto trading platform, was also charged with 13 counts by the SEC. Charges against the founder and discussions for a settlement to resolve the SEC’s investigations are reportedly underway.
The high surge in AI, with a 164.5% increase in chipmaker Nvidia, has pushed the S&P 500′s gains this year, leading to some concerns of a potential bubble forming, as critics suggest that the furor around AI may be masking weakness beneath the S&P 500′s surface. Even though the S&P 500 approaches a bull market, its stocks remain almost equally down and up, given concerns about decreasing corporate profits, high inflation, and significantly higher interest rates than a year ago.
In electronic trading on the New York Mercantile Exchange on Wednesday, US crude oil fell 49 cents to $71.25 a barrel. Last year, it was almost $120 but has fallen due to global economic concerns. The international standard, Brent crude’s barrel, saw a decline of 51 cents to $75.78 a barrel. On Tuesday, it lost 41 cents to $71.74 a barrel. The US dollar declined to 139.32 Japanese yen from 139.66 yen. The euro fell to $1.0677 from $1.0695. Investors are closely observing federal inflation updates to be published next week, followed by the Federal Reserve’s meeting on interest rate policy. The prevailing bet on Wall Street is that the Federal Reserve may hold off on hiking rates for the first time in more than a year but could resume raising rates in July. Coinbase has criticized the SEC’s approach to crypto, suggesting that the solution is legislation that allows fair rules to be developed transparently and applied equally, rather than litigation.