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Asian shares mixed after Wall St gains on Fed chair comments

BANGKOK (AP) — Shares were mixed in Asia on Wednesday after stocks rallied on Wall Street following comments by the chair of the Federal Reserve signaling that last week’s stunningly strong jobs report won’t by itself sway its stance on interest rates hikes.

Hong Kong, Sydney and Seoul rose while Tokyo and Shanghai declined. U.S. futures edged lower while oil prices were little changed.

The benchmark S&P 500 climbed 1.3% following a shaky day where stocks pinballed between losses and gains as Fed Chair Jerome Powell gave his first public comments since raising rates last week. Other indexes also gained.

Tokyo shares were weighed down by losses in electronics and tech-related companies like Nintendo and Sharp Corp. that have reported steep losses in the latest round of earnings.

SoftBank fell 6.5% after reporting its net profit sank $5.9 billion in the last quarter. Nintendo sank 7.4% following its latest earnings update, which showed a slight decline in profit in April-December from the year before.

The Nikkei 225 index lost 0.4% to 27,568.72. The Shanghai Composite index edged 0.1% lower to 3,246.53. Hong Kong's Hang Seng added 0.3% to 21,361.20. In Australia, the S&P/ASX 200 also gained 0.3% to 7,527.20.

South Korea's Kospi advanced 1.3% to 15,062.99. Shares slipped in Bangkok and rose in Taiwan and Singapore.

Tuesday on Wall Street, the S&P 500 rose to 4,164.00 and the Dow gained 0.8% to 34,156.69. The Nasdaq jumped 1.9% to 12,113.79.

High inflation and how high the Fed will take interest rates to combat it have been at the center of Wall Street's gyrations in the last year. Powell said on Tuesday that progress is being made on inflation, though a long battle remains.

That echoed similar comments he made last week, after the Fed approved its smallest increase to interest rates since March, before a jolting jobs report on Friday showed U.S. employers added a third of a million more jobs than expected last month.

That raised concerns about upward pressure on inflation and worries the Fed may keep rates higher for longer, as it’s been warning. Higher rates can drive down inflation but also hurt the economy and investment prices.

Powell said Tuesday at the Economic Club of Washington, D.C., that the market’s big moves since the jobs report have gotten it closer to in sync with the Fed’s thinking. Not only did stocks fall, Wall Street raised its forecast for how high the Fed will take rates by the summer.

“We have a significant road ahead to get inflation down to 2%,” which is the Fed’s target, Powell said Tuesday. “There’s been an expectation that it will go away quickly and painlessly. I don’t think that’s at all guaranteed.”

After pulling its key overnight rate all the way to a range of 4.50% to 4.75%, up from virtually zero a year ago, the Fed has said it envisions a couple more increases before holding steady through the end of the year.

Despite all the market's recent moves, stock prices are still up a healthy amount since the start of the year. The S&P 500 is up 8.5%. Much of that was due to easing worries the economy may fall into a severe recession, a scenario described in markets as a “hard landing.”

A relatively lackluster earnings reporting season is rolling on.

Carrier Global dropped 3.8% despite matching analysts’ expectations for profits in the latest quarter. DuPont climbed 7.5% after reporting stronger profit for the latest quarter than analysts expected. Activision Blizzard gained 5.6% after the video-game company reported stronger revenue and profit for its latest quarter than expected.

A 4.2% move higher for Microsoft also helped lift the market. It said it's using ChatGPT-like technology in its Bing search engine.

U.S. benchmark crude oil rose 7 cents to $77.21 per barrel in electronic trading on the New York Mercantile Exchange. It gained $3.03 to $77.14 per barrel on Tuesday.

Brent crude, the pricing benchmark for international trading, slipped 1 cent to $83.68 per barrel.

The U.S. dollar rose to 131.17 Japanese yen from 131.11 yen. The euro rose to $1.0733 from $1.0726.

___

AP Business Writer Stan Choe contributed.

 

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