A person looks at an electronic stock board showing Japan's Nikkei 225 index at a securities firm Tuesday, April 16, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)
A person looks at an electronic stock board showing Japan's Nikkei 225 index at a securities firm Tuesday, April 16, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)
A person walks in front of an electronic stock board showing Japan's Nikkei and New York Dow indexes at a securities firm Tuesday, April 16, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)
A person strolls with a dog in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm Tuesday, April 16, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)
Currency traders work near the screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, April 16, 2024. (AP Photo/Ahn Young-joon)
Currency traders work near the screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, April 16, 2024. Asian shares skidded Tuesday following a slump on Wall Street after higher yields in the U.S. bond market cranked up pressure on stocks. (AP Photo/Ahn Young-joon)
Currency traders work near the screen showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, April 16, 2024. Asian shares skidded Tuesday following a slump on Wall Street after higher yields in the U.S. bond market cranked up pressure on stocks. (AP Photo/Ahn Young-joon)
A person looks at an electronic stock board showing Japan's Nikkei 225 index at a securities firm Tuesday, April 16, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)
People walk near an electronic stock board showing Japan's Nikkei 225 index at a securities firm Tuesday, April 16, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)
The front of the New York Stock Exchange is shown on Thursday, April 11, 2024 in New York. (AP Photo/Peter Morgan)The New York Stock Exchange is seen, through a window guard, on Tuesday, April 16, 2024 in New York. Wall Street drifted toward gains as more corporate earnings come in, giving investors a break from fretting about if and when the Federal Reserve might cut interest rates. (AP Photo/Peter Morgan) 
Currency traders pass by the screen showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Wednesday, April 17, 2024. (AP Photo/Ahn Young-joon)A currency trader watches monitors near the screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Wednesday, April 17, 2024. (AP Photo/Ahn Young-joon) A currency trader passes by the screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Wednesday, April 17, 2024. (AP Photo/Ahn Young-joon) TOKYO (AP) — Asian shares were trading mixed Wednesday, as expectations resurfaced that U.S. interest rates may stay high for a while.
Japan's benchmark Nikkei 225 dipped 0.6% in morning trading to 38,226.39. Australia's S&P/ASX 200 edged up 0.2% to 7,624.70. South Korea's Kospi declined 0.3% to 2,603.22. Hong Kong's Hang Seng added 0.2% to 16,283.91, while the Shanghai Composite gained 0.6% to 3,026.20.
The mixed reaction came after Federal Reserve Chairman Jerome Powell said at an event Tuesday that the central bank has been waiting to cut its main interest rate, which is at its highest level since 2001, because it first needs more confidence inflation is heading sustainably down to its 2% target.
“Appetite for risk-taking remains weak, with Federal Reserve Chair Jerome Powell validating a later timeline for rate cuts, alongside a raft of Fed speakers calling for more patience in easing,” said Yeap Jun Rong, market analyst at IG.
On Wall Street, the S&P 500 fell 10.41 points, or 0.2%, to 5,051.41. The index deepened its loss from the day before, when it sank under the pressure brought by a jump in Treasury yields.
The Dow Jones Industrial Average rose 63.86, or 0.2%, to 37,798.97, and the Nasdaq composite fell 19.77, or 0.1%, to 15,865.25.
But the majority of stocks fell as Treasury yields rose following Powell's comments. They've been climbing rapidly as traders give up hopes that the Fed will deliver many cuts to interest rates this year. High rates hurt prices for all kinds of investments and raise the risk of a recession in the future.
“The recent data have clearly not given us greater confidence and instead indicate that it’s likely to take longer than expected to achieve that confidence,” Powell said, referring to a string of reports this year that showed inflation remaining hotter than forecast.
He suggested if higher inflation does persist, the Fed will hold rates steady “for as long as needed.” But he also acknowledged the Fed could cut rates if the job market unexpectedly weakens.
The yield on the two-year Treasury, which tracks expectations for Fed action, shot as high as 5% immediately after Powell spoke and got back to where it was in November.
But yields later pared their gains as the afternoon progressed, and the two-year yield drifted back to 4.98%. That's still up from 4.91% late Monday.
Traders are mostly betting on the Fed delivering just one or two cuts to interest rates this year after coming into 2024 expecting six or more. They're now also betting on a 12.5% probability that no cuts are coming, up from just 1.2% a month ago, according to data from CME Group.
Companies are under even more pressure than usual to report fatter profits and revenue because the other lever that sets stock prices, interest rates, looks unlikely to add much lift soon.
The stock of Donald Trump's social-media company also slumped again. Trump Media & Technology Group fell another 14.2% to follow up on its 18.3% slide from Monday.
The company said it's rolling out a service to stream live TV on its Truth Social app, including news networks and “other content that has been cancelled, is at risk of cancellation, or is being suppressed on other platforms and services.”
The stock has dropped below $23 after nearing $80 last month as euphoria fades around the stock and the company made moves to clear the way for some investors to sell shares.
In energy trading, benchmark U.S. crude shed 47 cents to $84.89 a barrel. Brent crude, the international standard, fell 44 cents to $89.58 a barrel.
In currency trading, the U.S. dollar inched up to 154.67 Japanese yen from 154.65 yen. The euro cost $1.0630, up from $1.0617.
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AP Business Writer Stan Choe contributed.
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