After several days of growth, Wall Street falls, Asian markets rise

On Wall Street, stock prices fell on Tuesday after several days of growth, as there were no news to support the market and investors are concerned about rising yields on government bonds. The Dow Jones index weakened by 0.27 percent to 42,677 points, while the S&P 500 slipped 0.39 percent to 5,940 points, and the Nasdaq index fell 0.38 percent to 19,142 points.

For the S&P 500, this is the first decline after six days of growth. Investors focused on the bond market yesterday, as yields increased, meaning the government must borrow at a higher cost.

On Friday, Moody’s downgraded the US credit rating from Aaa to Aa1 due to a large federal budget deficit, high financing costs, and planned tax cuts.

Previously, Fitch and S&P Global Ratings had also taken similar actions due to elevated public debt. The US public debt stands at around $36.2 trillion, and it is expected to continue rising over the next ten years as Republicans plan to cut taxes.

Yesterday, US President Donald Trump urged Republican lawmakers to support a bill that would reduce taxes. A tax cut would likely stimulate consumption and support economic growth, but on the other hand, public debt would increase if government spending is not reduced.

Meanwhile, European stock prices rose yesterday. The London FTSE index strengthened by 0.94 percent to 8,781 points, while the Frankfurt DAX rose by 0.42 percent to 24,036 points, and the Paris CAC increased by 0.75 percent to 7,942 points.

Oil prices significantly increased

In Asian markets on Wednesday, stock prices rose, while the dollar remains under pressure due to the downgrade of the US credit rating and rising yields on US government bonds. The MSCI Asia-Pacific index was up 0.5 percent at 7:00 AM, hovering around its highest levels in seven months.

Stock prices in Shanghai, Australia, Hong Kong, and South Korea rose between 0.4 and 0.9 percent. In Japan, however, they fell by 0.35 percent. The decline in stock prices on the Tokyo Stock Exchange is partly due to data showing that Japanese exports to the US fell in April.

Although total exports have increased for the seventh consecutive month, investors are concerned about how future tariffs on imports to the US will affect the already weakening Japanese economy.

On other exchanges in the region, sentiment is positive after Chinese and Australian monetary authorities cut interest rates the day before to support economic growth.

As a result, the value of the dollar against a basket of currencies further declined this morning, having dropped 1.3 percent since the beginning of the week. The dollar index, which shows the value of the US dollar against the other six major world currencies, slipped to 99.94 points this morning, down from 100.32 points at the same time yesterday.

The exchange rate of the US dollar against the Japanese yen fell from yesterday’s 144.70 to 144.30 yen. The US currency also weakened against the euro, with the euro price rising to $1.1290, compared to $1.1250 at the same time yesterday.

Oil prices, on the other hand, significantly increased following news that Israel is preparing an attack on Iranian nuclear facilities. The price of a barrel on the London market rose by 1.80 percent to $66.55, while on the US market, a barrel increased by 1.92 percent to $63.20.