TOKYO (AP) — Asian stocks fell on Wednesday after a shaky day ended with mixed results on Wall Street as markets fret over the prospect of a possible recession.
Tokyo’s Nikkei 225 index fell 2.1% to 26,020.56 while Seoul’s Kospi lost 2.8% to 2,161.95. In Sydney, the S&P/ASX 200 fell 0.8% to 6,442.40.
Hong Kong’s Hang Seng fell 2.8% to 17,363.08 and the Shanghai Composite Index fell 1.3% to 3,053.79. Taiwan’s benchmark fell 2.6%.
The week began with a broad selloff that sent the Dow Jones Industrial Average into a bear market, joining other major US indices.
On Tuesday, the S&P 500 slid 0.2% to 3,647.29, its sixth consecutive decline. The Dow fell 0.4% to 29,134.99, while the Nasdaq composite closed with a 0.2% gain, closing at 10,829.50.
Small company stocks held up better than the broader market. The Russell 2000 added 0.4%, to close at 1,662.51.
Major indexes remain in a prolonged slump. With just a few days left in September, stocks are heading for another losing month as markets fear higher interest rates used to fight inflation could push the economy into a recession.
The S&P 500 fell about 8% in September and has been in a bear market since June, when it fell more than 20% below its all-time high set on Jan. 4. The Dow’s decline on Monday put it in the same company as the benchmark and the tech-heavy Nasdaq.
Central banks around the world have raised interest rates in a bid to make borrowing more expensive and quell the highest inflation in decades. The Federal Reserve has been particularly aggressive and raised its benchmark rate, which affects many consumer and business loans, again last week. It is now in a range of 3% to 3.25%. It was almost nil at the start of the year.
The Fed also released a forecast suggesting that its benchmark rate could be 4.4% by the end of the year, one percentage point higher than it was looking at in June.
Wall Street fears that the Fed is putting the brakes on an already slowing economy too hard and pushing it into a recession. Higher interest rates have weighed on stocks, especially more expensive tech 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 handling inflation. Companies will start publishing their latest quarterly results in early October.
Consumer confidence remains strong, despite rising prices for everything from food to clothing. The Conference Board’s latest consumer confidence report for September showed confidence was stronger than economists expected.
The government will release its weekly report on unemployment benefits on Thursday, along with an updated report on gross domestic product for the second quarter. On Friday, the government will release another personal income and spending report that will help provide more detail on where and how inflation is hurting consumer spending.
In other trading on Wednesday, benchmark U.S. crude fell $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.