Global Stocks Mixed, After US Retail Data Offset Rate Fears

Global stock markets were mixed and Wall Street futures were lower Wednesday after positive US retail sales data helped to offset concern the Federal Reserve might consider more rate hikes to cool inflation. London and Frankfurt opened lower. Tokyo and Seoul advanced, while Shanghai declined. Oil prices rose more $1 to stay above $110 per barrel.

On Wall Street, the future for the S&P 500 index was down 0.4% after the market benchmark rose by 2% on Tuesday. That came after positive US retail sales data helped to offset worries about inflation and rate hikes. The Fed will "have to consider moving more aggressively" if inflation that is running at a four-decade high fails to ease after earlier rate hikes, chair Jerome Powell said at a Wall Street Journal conference. Expectations of rate hikes "ticked higher" due to Powell's comments, but "markets are shrugging it off and are in need of a breather" after a selloff, Yeap Jun Rong of IG said in a report. In early trading, the FTSE 100 in London fell less than 0.1% to 7,514.29 and the DAX in Frankfurt shed 0.1% to 14,170.91.

The CAC 40 in Paris sank 0.3% to 6,413.78. On Wall Street, the future for the Dow Jones Industrial Average was off 0.3%. On Tuesday, the Dow rose 1.3% and the Nasdaq composite gained 2.8%. Big tech stocks led the rally. Apple and Microsoft were among the biggest winners. In Asia, the Shanghai Composite Index lost 0.3% to 3,085.96 while the Hang Seng in Hong Kong rose 0.2% to 20,644.28 after spending most of the day in negative territory.

The Nikkei 225 in Tokyo gained 0.9% to 26,911.20 after the government reported economic output shrank 0.2% in the first three months of 2022. That was stronger than expectations. The Kospi in Seoul gained 0.2% to 2,625.98 and Sydney's S&P-ASX 200 advanced 1% to 7,182.70. India's Sensex was off less than 0.1% at 54,281.05. Bangkok declined while New Zealand and other Southeast Asian markets rose. US investors on Tuesday welcomed a Commerce Department report that showed retail sales rose 0.9% in April.

Consumers are providing critical support to the US economy despite higher costs for gas, food and rent. The economy contracted in the first three months of the year, but consumer and business spending still increased at a healthy pace. The Fed and other central banks are raising interest rates that have been near zero during the coronavirus pandemic or say they plan to in order to cool inflation.

Supply chain problems have prompted businesses to raise prices on everything from food to clothing as demand rebounds after the pandemic. Oil and gas prices have been pushed up by Russia's war on Ukraine, which fueled fears Russian supplies might be disrupted. In energy markets, benchmark U.S. crude rose $1.97 to $114.37 per barrel in electronic trading on the New York Mercantile Exchange.

The contract fell $1.80 on Tuesday to $112.40. Brent crude, the price basis for international oil trading, added $1.52 to $113.45 per barrel in London. It lost $2.31 the previous session to $111.93. The dollar declined to 129.21 yen from Tuesday's 129.42 yen. The euro sank to $1.0512 from $1.0543.

(PTI)