TOKYO (AP) โ Stocks fell Wednesday in Europe and Asia as a rise in bond yields added pressure on shares.
France's CAC 40 fell 0.7% in early trading to 8,001.58, while Germany's DAX fell 0.4% to 18,596.23. Britain's FTSE 100 fell almost 0.2% to 8,240.60.
The S&P 500 future fell 0.6%, while the Dow Jones Industrial Average future fell 0.5%.
In Asian trading, Japan's benchmark Nikkei 225 index lost 0.8% to 38,556.87. Australia's S&P/ASX 200 fell 1.3% to 7,665.60. South Korea's Kospi lost 1.7% to 2,677.30. Hong Kong's Hang Seng fell 1.8% to 18,477.01, while the Shanghai Composite was little changed, rising less than 0.1% to 3,111.02.
The International Monetary Fund raised its forecast for China's economic outlook, saying it expects the second-largest economy to grow at an annual rate of 5% this year. But he also warned that consumer-friendly reforms are needed to sustain strong, high-quality growth.
Strong spending by American consumers has been one of the main reasons the economy has managed to defy predictions of a recession, at least so far, but some cracks have begun to appear. In particular, low-income households have begun to buckle under the pressure of still high inflation.
The Federal Reserve has kept the federal funds rate at the highest level in more than two decades in hopes of slowing economic and investment prices enough to fully control high inflation. If you leave rates too high for too long, it could hurt the job market and the broader economy. But a premature interest rate cut could allow inflation to reaccelerate and inflict even more pain on American households.
A rise in bond yields has weighed on stock prices. Higher yields can make payments on everything from mortgages to credit cards more expensive and tend to put downward pressure on the economy.
On Tuesday, the S&P 500 closed little changed, just below its record set a week ago. The Dow Jones Industrial Average fell 0.6%, while gains in technology stocks lifted the Nasdaq composite 0.6% to another all-time high.
There are several reports this week that could influence the Federal Reserve's thinking, beyond Tuesday's report on consumer confidence.
The highlight is likely to come on Friday, when the government releases its latest monthly report on household spending and income earned. It will also include the April inflation measure that the Federal Reserve prefers to use.
In other trading, benchmark U.S. crude rose 72 cents to $80.55 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, added 74 cents to $84.96 a barrel.
In currency trading, the US dollar was unchanged at 157.12 Japanese yen. The euro was worth $1.0839, down from $1.0857.
