Stock market today: Asian shares fall after torrent of earnings reports leaves Wall Street mixed

Asian stocks fell on Wednesday as markets digested Japanese and Australian corporate data, after US stocks held relatively steady as earnings reporting season ramped up for big companies.

US futures fell while oil prices rose.

Japan’s benchmark Nikkei 225 index fell 1.1% to 39,154.85, with the Japanese yen trading at its highest level in months ahead of a Bank of Japan policy decision next week.

The US dollar traded above 162 yen earlier this month, but the Japanese currency has strengthened in recent days after authorities intervened to stem the yen’s decline. Expectations that the Bank of Japan might raise its interest rate to near zero and that the Federal Reserve might in turn cut rates helped support the yen, which languished as the difference between interest rates and of the USA and Japan increased.

On Wednesday, the dollar traded at 154.68 yen, down from 155.59 yen on Tuesday.

A business survey released on Wednesday showed that Japan’s industrial activity contracted in July as weak demand weighed on the manufacturing sector. Services were on the rise, helping to drive growth in overall activity in Japan’s private sector.

Elsewhere in Asia, Hong Kong’s Hang Seng lost 1.1% to 17,320.49, led by the Hang Seng Tech Index, which sank 1.6%. The Shanghai Composite fell 0.5% to 2,901.95.

S of Australia&OP/ASX 200 fell 0.1% to 7,963.70 after the services sector recorded weaker growth in July. The manufacturing industry improved slightly, but remained in contractionary territory.

South Korea’s Kospi fell 0.6% to 2,758.71, while heavyweight Samsung Electronics fell 2.2% after talks between the company and its largest workers union ended without a deal. Earlier this month, workers declared an indefinite period beat to pressure the company to accept their pleas for higher wages and other benefits.

On Tuesday, S.&P500 fell 0.2% to 5,555.74. The Dow Jones Industrial Average fell 0.1% to 40,358.09 and the Nasdaq Composite fell 0.1% to 17,997.35.

But smaller stocks in the Russell 2000 continued to rise and rose 1%. They recently flipped the market leaderboard and rose amid hopes of interest rate cuts.

Mixed trading took place in the form of dozens of companies reported their spring results, with headliners Alphabet and Tesla arriving after the close of trading for the day. Expectations are high and analysts predict stronger earnings growth for S&P 500 companies broadly as of late 2021, according to FactSet.

UPS was one of the heaviest hitters in the S&P 500 and fell 12.1% after reporting weaker earnings and revenue in the spring than analysts expected.

But CEO Carol Tomé said the company’s U.S. business delivered more packages than the previous year, its first this growth in nine quarters and called it a “significant turning point for our company”.

Nvidia it was the stock pushing down harder on the S&P 500. Its 0.8% loss for the day was relatively modest, but the S&P500 gives more weight to bigger stocks and Nvidia is worth over $3 trillion.

This is despite high mortgage rates having cooled the real estate sector. A report on Tuesday showed sales of previously occupied homes weakened even more in June than economists expected. Sales have slowed in part because prices for previously occupied homes are at the highest level on record, according to the National Association of Realtors.

Easier times may be ahead for rates. With inflation slowing, the general expectation is that the Federal Reserve will begin reducing its main interest rate in September. That would provide some relief to both the economy and financial markets after the Fed kept the federal funds rate at its highest level in more than two decades.

In other trading, benchmark US crude oil gained 40 cents to $77.36 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the international standard, rose 39 cents to $81.40 per barrel.

The euro fell to $1.0848 from $1.0855.