BANGKOK — Asian markets opened the week with mixed results as U.S. stocks experienced their largest drop since the Election Day aftermath.
U.S. futures exhibited an upward trend, with the S&P 500 contract rising by 0.3% and the Dow Jones Industrial Average increasing by 0.1%. Speculation continues regarding potential nominees for the Treasury secretary position under President-elect Donald Trump.
Japan’s Nikkei 225 index fell 1.1% to 38,220.85 as the yen gained some strength against the U.S. dollar. This follows comments from Bank of Japan Governor Kazuo Ueda, signaling an intention to raise interest rates as economic conditions allow.
The dollar edged up, trading at 154.58 yen, recovering slightly from late Friday’s 154.54 yen, although it previously exceeded 156 yen during the past week.
In South Korea, the Kospi surged 2.2% to 2,469.07 after Samsung Electronics announced a substantial share buyback plan, leading to a 6% increase in its stock price.
China’s stock markets had mixed performances. The Hang Seng index in Hong Kong rose by 0.8% to 19,572.34, while the Shanghai Composite index reversed early gains, ending the day down 0.2% at 3,323.55.
Other Asian markets showed slight gains, with Australia’s S&P/ASX 200 increasing by 0.2% to 8,300.20, Taiwan’s Taiex dropping by 0.9%, and Thailand’s SET index gaining 0.8% following reports of stronger-than-expected economic growth in the last quarter.
On the previous Friday, U.S. stocks plummeted, marking the end of a significant rally inspired by the recent presidential election, coupled with interest rate cuts from the Federal Reserve.
The S&P 500 fell 1.3% to 5,870.62, marking its worst day since before Election Day. The Dow Jones Industrial Average dropped 0.7% to 43,444.99, while the Nasdaq composite decreased by 2.2% to 18,680.12.
Concerns arose as vaccine manufacturers faced setbacks after Trump suggested an anti-vaccine activist could lead the Department of Health and Human Services. This announcement led to a significant decline in shares of companies like Moderna and Pfizer.
Though Kennedy requires Senate confirmation for the position, analysts express skepticism regarding his prospects.
Biotech stocks suffered marked losses, with the most pronounced drop in the S&P 500 attributed to Applied Materials, which fell 9.2% after projecting revenue figures that lagged behind analyst expectations, despite reporting a better-than-expected profit for the last quarter.
The pressure mounts on companies to deliver substantial growth as their stock prices have outpaced earnings. Despite last week’s downturn, the S&P 500 remains up 23% for the year and near its all-time high.
Since Election Day, stocks have surged, positively influenced by Trump’s victory, which sparked a wave of investment in banks, smaller U.S. firms, and cryptocurrencies, driven by expectations surrounding his pro-business policies.
However, apprehensions surrounding potential repercussions from Trump’s policies—such as increased government deficits and inflation—are influencing investor strategies.
Traders are reassessing expectations of potential Federal Reserve relief for the economy. Earlier this month, the Fed cut its main interest rate for the second time within the year, with past forecasts suggesting more cuts could occur through 2025.
Fed Chair Jerome Powell recently indicated caution regarding future interest rate decisions, noting, “The economy is not sending any signals that we need to be in a hurry to lower rates,” without commenting on how Trump’s policies might shift economic dynamics.
Recent retail spending data suggested stronger-than-expected consumer expenditure, reaffirming consumer spending’s crucial role in the economy’s trajectory.
In commodities, U.S. benchmark crude oil rose by 13 cents to $67.15 per barrel, while Brent crude gained 27 cents, reaching $71.31 per barrel.
The euro rose slightly against the dollar, trading at $1.0543, up from $1.0534 on Friday.
