Stock Exchange Today: Most Asian Stocks Decline Ahead of Central Bank Meetings

TOKYO (AP) — Asian stocks were mostly lower in cautious trading Tuesday ahead of central bank meetings around the world.

The Federal Reserve, the Bank of England and the Bank of Japan hold monetary policy meetings this week.

Japan's Nikkei 225 index fell 0.5% in morning trade to 38,268.72. Australia's S&P/ASX 200 fell 0.9% to 7,915.10. South Korea's Kospi fell 0.7% to 2,747.06. Hong Kong's Hang Seng Index fell 0.8% to 17,093.32, while the Shanghai Composite Index fell 0.7% to 2,871.62.

“Markets may have difficulty determining the stance of central bank meetings this week,” said Jing-Yi Tan of Mizuho Bank.

In Japan, the government announced that the country's unemployment rate in June was 2.5%, down slightly from 2.6% the previous month and marking the first improvement in five months.

U.S. stock indexes fell to a mixed close on Monday at the start of a week filled with earnings reports from The most influential companies on Wall Street And a Fed meeting On interest rates.

The S&P 500 rose 4.44 points, or 0.1%, to 5,463.54, after suffering its first back-to-back weekly losses since April. The Dow Jones Industrial Average fell 49.41 points, or 0.1%, to 40,539.93, and the Nasdaq Composite added 12.32 points, or 0.1%, to 17,370.20.

ON Semiconductor helped lead the market with an 11.5% gain after the automaker and other industries reported stronger-than-expected quarterly earnings. McDonald’s shares rose 3.7% despite reporting fourth-quarter earnings and revenue. which did not live up to expectationsAnalysts said the company's performance in U.S. restaurants was not as bad as some investors had feared.

The declines helped offset losses in oil and gas companies, which were among the market’s heaviest losers after oil prices tumbled to their two-month lows. ConocoPhillips lost 1.6% and Exxon Mobil Corp fell 1% amid concerns about how much crude China’s struggling economy might consume.

Several of Wall Street’s biggest companies are scheduled to report earnings later this week: Microsoft on Tuesday, Meta Platforms on Wednesday, and Apple and Amazon on Thursday. Their stock moves carry additional weight on Wall Street because they are among the largest companies in the market by total value.

Such large-cap tech stocks have pushed the S&P 500 to dozens of records this year, in part because investors are eager to buy new shares. The hype around artificial intelligence Technology, but it has lost momentum this month amid criticism that it has become too expensive, and as alternatives begin to look more attractive. Last week, investors found earnings reports from Tesla And the alphabet The results were disappointing, raising concerns that other stocks in the so-called “Magnificent Seven” group of big tech stocks may also fail to impress.

According to Bank of America strategists led by Savita Subramanian, “The days of AI hype are over, and it’s time to show the potential to make money.”

What helped support the U.S. stock market even as big tech companies weakened was strength from other regions that have been battered by higher interest rates aimed at controlling inflation. Smaller stocks It rose particularly on expectations that the slowdown economic inflation This will prompt the Federal Reserve to soon start cutting interest rates.

That pattern eased slightly on Monday, with most of the big tech stocks rising while smaller stocks in the Russell 2000 fell 1.1%. But the Russell 2000 is still up 9.2%, its highest level in the market so far this month.

The Federal Reserve is scheduled to hold its final interest rate meeting this week, with an announcement due on Wednesday. Few expect any action at that time, but widespread expectations are that the bank will begin easing monetary policy at its next meeting in September.

Treasury yields remained relatively steady in the bond market, with the yield on the 10-year note falling to 4.17% from 4.19% late Friday. It had been at a high of 4.70% in April.

In energy trading, benchmark U.S. crude fell 19 cents to $75.62 a barrel. Global benchmark Brent crude fell 19 cents to $79.59.

In currency trading, the US dollar rose to 154.05 Japanese yen from 154.00 yen. The euro fell to $1.0816 from $1.0826.

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Associated Press business writer Stan Choi contributed to this report.