Asian Markets in Downturn After Profit-Taking and Commodity Price Surge
Asian markets experienced a downturn on Tuesday after a series of gains, as profit-takers took the opportunity to cash in on their investments. This decline was also influenced by a surge in commodity prices that spooked traders.
Investors are eagerly waiting for the release of minutes from the Federal Reserve’s May policy decision in hopes of gaining insight into officials’ thoughts as they assessed inflation data. Despite three consecutive readings of higher-than-expected inflation, recent figures suggest that price rises are stabilizing. This has raised hopes that the central bank may consider cutting interest rates later this year, with possibilities of a first rate cut in July or November.
However, some Fed decision-makers have cautioned against premature rate reductions, emphasizing the importance of ensuring that higher borrowing costs are effective in controlling inflation.
After a moderately positive day in New York, where the Nasdaq set a new record high and the Dow closed slightly lower than its previous record, Asian investors remained cautious due to rising commodity prices. Copper hit a record high above $11,400 on Monday, reflecting its role as a key indicator of the economy. Gold and silver also neared their peak prices, driven by various factors including supply constraints and prospects of Fed easing.
Hong Kong led the losses in Asian markets, dropping by around two percent after a significant 30 percent increase from its January low. Other markets like Shanghai, Sydney, Seoul, Singapore, Taipei, Wellington, and Manila also experienced declines, while Tokyo and Jakarta saw marginal gains.
Investors are now awaiting Nvidia’s upcoming earnings report, as the tech giant is set to release its financial results on Wednesday. Analysts anticipate that Nvidia’s high-end processors, which are popular among artificial intelligence companies, will draw significant attention.
Freedom Capital Markets’ Jay Woods highlighted the importance of Nvidia’s earnings event for market momentum this week, suggesting that it could dominate discussions on trading desks and financial media.
