By Associated Press
BEIJING — Asian stocks followed Wall Street lower Tuesday as fears increased that U.S. rate hikes to fight inflation might stall economic growth.
The Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP +1.43% gained 0.2% after the Chinese government announced rent cuts and other aid for small businesses in a new effort to boost anemic economic growth.
The Kospi /zigman2/quotes/210598069/delayed KR:180721 -1.26% in Seoul shed 1.2% and Sydney’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -1.02% declined 1.4%. New Zealand /zigman2/quotes/211587880/delayed NZ:NZ50GR -0.82% and Southeast Asian markets /zigman2/quotes/210597985/delayed SG:STI -0.31% /zigman2/quotes/210597981/delayed ID:JAKIDX +0.37% also retreated.
Wall Street’s benchmark S&P 500 index tumbled 3.2% on Monday, hitting its lowest point in more than a year.
The Federal Reserve is trying to cool inflation that is running at a four-decade high, but investors worry that might trigger a U.S. downturn. That adds to pressure from Russia’s war on Ukraine and a Chinese slowdown.
Traders are pricing in the “impending deterioration of economic conditions,” said Yeap Jun Rong of IG in a report.
On Wall Street, the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.07% sank to 3,991.24. That leaves Wall Street’s benchmark down 16.8% from its Jan. 3 record.
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.27% fell 2% to 32,245.70. The Nasdaq composite /zigman2/quotes/210598365/realtime COMP -0.03% slid 4.3% to 11,623.25 as tech stocks to the brunt of the selling.
Stocks have declined as the Fed turns away from a strategy of pumping money into the financial system, which boosted prices.
The U.S. central bank has raised its key rate from close to zero, where it sat for much of the coronavirus pandemic. Last week, it indicated it will double the size of future increases from its usual margin.
China on Monday reported export growth fell in April due to weak global demand while imports grew less than 1% over a year earlier.
In energy markets, benchmark U.S. crude sank $2.02 to $101.07 per barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $6.68 to $103.09 on Monday. Brent crude , the price basis for international oil trading, lost $2.14 to $103.80 per barrel in London. It fell $6.45 the previous session to $105.94.
The dollar /zigman2/quotes/210561789/realtime/sampled USDJPY -0.1750% declined to 130.22 yen from Monday’s 130.32 yen.