A currency trader gives a thumps up 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, May 14, 2024. Asian shares were mixed in muted trading Tuesday, after U.S. stock indexes drifted to a mixed finish. (AP Photo/Ahn Young-joon)
TOKYO — Asian shares were mixed in muted trading Tuesday after U.S. stock indexes were little changed ahead of the release of inflation data.
Japan’s benchmark Nikkei 225 gained 0.3 percent to 38,287.41. Australia’s S&P/ASX 200 slipped 0.4 percent to 7,723.10. South Korea’s Kospi rose 0.2 percent to 2,731.62.
Chinese markets were flat ahead of an expected announcement by the Biden administration on raising tariffs on imports from China. Hong Kong’s Hang Seng slipped less than 0.1 percent to 19,096.65, while the Shanghai Composite also lost less than 0.1 percent, to 3,147.54.
Investors were watching for indicators of inflation to gauge the direction of economic growth, as well as the strength of the dollar.
“Today marks a significant day for both Germany and the U.S.A. as they are set to unveil crucial economic data,” said Luca Santos, market analyst at ACY Securities, referring to consumer price data from Germany and producer costs in the U.S.
“Despite their different focuses, both indices offer insights into how inflation is shaping society,” said Santos.
READ: Wall Street barely budges as S&P 500 remains just shy of its record
On Monday, the S&P 500 edged down less than 0.1 percent, to 5,221.42 after flipping between small gains and losses throughout the day. It remains within 0.6 percent of its record set at the end of March.
GameStop and other meme stocks
The Dow Jones Industrial Average slipped 0.2 percent to 39,431.51, and the Nasdaq composite rose 0.3 percent, to 16,338.24.
Biopharmaceutical company Incyte jumped 8.6 percent after saying it would buy back up to $2 billion of its stock. It’s the latest big company to say it’s returning cash to shareholders through such purchases, which boost the amount of earnings that each remaining share is entitled to.
GameStop soared 74.4 percent in a swing reminiscent of its maniacal moves from three years ago, when hordes of smaller-pocketed investors sent the stock’s price way above what many professional investors considered rational.
Stocks have broadly rallied this month following a rough April on revived hopes that inflation may ease enough to convince the Federal Reserve to cut its main interest rate later this year.
A key test for those hopes will arrive Wednesday when the U.S. government offers the latest monthly update on inflation that households are feeling across the country.
Other reports this week include updates on inflation that wholesalers are seeing and sales at U.S. retailers. They could show whether fears are warranted about a worst-case scenario for the country, where stubbornly high inflation forms a devastating combination with a stagnating economy.
Hopes have climbed that the economy can avoid what’s called “stagflation” and hit the bull’s eye where it cools enough to get inflation under control but stays sturdy enough to avoid a bad recession.
Avoiding stagflation
Federal Reserve Chair Jerome Powell also gave financial markets comfort when he recently said the Fed remains closer to cutting rates than to raising them, even if inflation has remained hotter than forecast so far this year.
READ: US Fed’s Powell says inflation fight may take ‘longer than expected’
A stream of stronger-than-expected reports on U.S. corporate profits has helped support the market. Companies in the S&P 500 are on track to report growth of 5.4 percent for their earnings per share in the first three months of the year versus a year earlier, according to FactSet. That would be the best growth in nearly two years.
Earnings season has nearly finished, and reports are already in for more than 90 percent of companies in the S&P 500. But this upcoming week includes Walmart and several other big names. They could offer more detail about how U.S. households are faring.
Worries have been rising about cracks showing in spending by U.S. consumers, which has been one of the bedrocks keeping the economy out of a recession. Lower-income households appear to be under particularly heavy strain amid still-high inflation.
The Biden administration is expected to announce this week that it will raise tariffs on electric vehicles, semiconductors, solar equipment, and medical supplies imported from China, according to people familiar with the plan. Tariffs on electric vehicles, in particular, could quadruple to 100 percent.
In other trading, benchmark U.S. crude added 12 cents to $79.24 a barrel. Brent crude, the international standard, rose 12 cents to $83.48 a barrel.
The U.S. dollar rose to 156.42 Japanese yen from 156.21 yen. The euro cost $1.0789, down from $1.0790.