After major Wall Street wobble, Asian shares down sharply

TOKYO (AP) — Asian stocks fell Wednesday after a wobbly day that ended with mixed results on Wall Street, as markets jittered over the prospect of a possible recession.

Tokyo’s Nikkei 225 sank 2.1 percent to 26,020.56, while Seoul’s Kospi lost 2.8 percent to 2,161.95. In Sydney, the S&P/ASX 200 slipped 0.8% to 6,442.40.

Hong Kong’s Hang Seng fell 2.8% to 17,363.08 and the Shanghai Composite fell 1.3% to 3,053.79. Taiwan’s benchmark fell 2.6%.

The week began with a broad sell-off that sent the Dow Jones Industrial Average into a bear market, joining other major US indexes.

On Tuesday, the S&P 500 fell 0.2% to 3,647.29, its sixth straight loss. The Dow fell 0.4% to 29,134.99, while the Nasdaq ended up 0.2% at 10,829.50.

Small-cap stocks outperformed the broader market. The Russell 2000 added 0.4% to close at 1,662.51.

Major indexes remain in a prolonged decline. With September just days away, stocks are headed for another month of losses as markets fear higher interest rates used to fight inflation could tip the economy into recession.

The S&P 500 is down about 8% in September and has been in a bear market since June, when it had fallen more than 20% below its all-time high set on Jan. 4. The fall in the Dow on Monday put it at the same level. company as a reference index and the Nasdaq, with great technology.

Central banks around the world have raised interest rates in an effort to make borrowing more expensive and to cool the highest inflation in decades. The Federal Reserve has been particularly aggressive, raising its benchmark rate, which affects many consumer and business loans, again last week. It now stands between 3% and 3.25%. At the beginning of the year it was practically at zero.

The Fed has also released a forecast suggesting its benchmark rate could be 4.4% by the end of the year, a full percentage point higher than expected in June.

Wall Street worries that the Fed will rein in an already slowing economy too hard and push it into recession. Higher interest rates have been weighing on stocks, especially more expensive technology companies, which tend to look less attractive to investors as rates rise.

Investors will be watching the next round of corporate earnings very closely to get a better idea of ​​how companies are dealing with inflation. Companies will begin publishing their latest quarterly results in early October.

Consumer confidence remains strong, despite higher prices for everything from food to clothing. The latest September consumer confidence report from The Conference Board showed that confidence was stronger than economists had expected.

The government will release its weekly report on unemployment benefits on Thursday, along with an updated report on second-quarter gross domestic product. On Friday, the government will release another report on personal income and spending that will help provide more detail on where and how inflation affects consumer spending.

In other trading Wednesday, benchmark U.S. crude lost $1.28 to $77.23 a barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, used to price international oils, fell $1.27 to $83.60 a barrel in London.

The dollar fell to 144.73 Japanese yen from 144.81 yen. The euro was at 95.55 cents, down from 95.92 cents.

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