Stocks retreated in Europe and Asia on Friday after unexpectedly strong reports on the U.S. economy raised the prospect of interest rates remaining painfully high.
US futures rose, while oil prices fell.
In early European trading, Germany's DAX lost 0.6% to 18,638.00, while Paris' CAC 40 lost 0.4% to 8,071.23. Britain's FTSE 100 lost 0.5% to 8,301.27.
S&P 500 and Dow Jones Industrial Average futures rose 0.1%.
Japan's Nikkei 225 index lost 1.2% to 38,646.11 after the government reported that core inflation, excluding volatile food and energy prices, was 2.2% in April, lower than expected. provided. Analysts said that suggested less pressure on the Bank of Japan to raise interest rates.
โIn fact, in seasonally adjusted terms, consumer prices, excluding fresh food and energy, have remained stable for two consecutive months. That means it won't be long before inflation, excluding fresh food and energy, falls below the Bank of Japan's 2% target,โ Marcel Thieliant of Capital Economics said in a commentary.
He said it was unlikely the central bank would be able to raise its key rate, much more so after it raised it to a range of zero to 0.1% from -0.1% in March.
In Hong Kong, the Hang Seng fell 1.5% to 18,590.33, while the Shanghai Composite Index fell 0.9% to 3,088.87.
The rally in real estate stocks following the announcement of new measures to support the ailing industry has proven short-lived, as market players question whether it will be enough to end a prolonged crisis in the real estate sector.
Shares of China Vanke, a major developer, fell 6%, as did shares of Shimao Group Holdings, another major property company, listed in Hong Kong. Agile Group Holdings sank 8%.
South Korea's Kospi fell 1.3% to 2,687.60, while in Australia, the S&P/ASX 200 lost 1.1% to 7,727.60.
Taiwan's Taiex fell 0.2% after hitting an all-time high on Thursday.
Most U.S. stocks plunged on Thursday as strong economic reports fueled concerns that the Federal Reserve could keep interest rates high to ensure inflation is brought under control. The weakness was widespread and overshadowed another spectacular earnings report from market heavyweight Nvidia.
The S&P 500 fell 0.7% in its steepest decline since April. The Dow Jones Industrial Average fell 1.5% and the Nasdaq composite fell 0.4%.
A report suggested that growth in American business activity is reaching its fastest pace in more than two years. S&P Global said its preliminary data showed growth improved for companies not only in the services sector but also in manufacturing.
A separate report showed the U.S. labor market remains strong despite high interest rates. Fewer workers filed for unemployment benefits last week than economists expected, an indication that layoffs remain low.
The Federal Reserve is trying to accomplish the difficult feat of slowing the economy enough through high rates to bring inflation back to 2%, but not enough to force a painful recession. To achieve this, it has been keeping its main interest rate at the highest level in more than two decades, and Wall Street is eager for some easing.
The steepest drop within the S&P 500 came from Live Nation Entertainment, which fell 7.8% after the Justice Department charged it and its Ticketmaster business with running an illegal monopoly on live events in the country.
In other trading early Friday, benchmark U.S. crude oil fell 19 cents to $76.68 a barrel in electronic trading on the New York Mercantile Exchange. He made 30 cents on Thursday.
Brent crude, the international standard, fell 15 cents to $81.21 a barrel.
The US dollar rose to 157.04 Japanese yen from 156.96. The euro rose to $1.0824 from $1.0817.
