TOKYO — Asian shares traded mixed on Thursday as investor sentiment in Tokyo was boosted by news of rising Nvidia profits.
Japan's benchmark Nikkei 225 gained 1.3% to 39,103.22. The Australian S&The P/ASX 200 fell 0.5% to 7,811.80. South Korea's Kospi rose 0.1% to 2,726.33. Hong Kong's Hang Seng fell 1.6% to 18,892.21, while the Shanghai Composite lost 1.2% to 3,120.35.
Semiconductor issues were boosted by news that Nvidia's profits soared above expectations, with quarterly net profit rising more than sevenfold from a year earlier to $14.88 billion. Sales have more than tripled for what has become the iconic brand behind the recent artificial intelligence boom.
In Asia, the Bank of Korea also kept its policy interest rate unchanged, as was widely expected.
On Wall Street, indexes retreated from their record highs as concerns about high interest rates weighed on the market.
The S&The P500 fell 0.3% to 5,307.01, a day after setting its last all-time high. The Dow Jones Industrial Average fell 0.5% to 39,671.04, and the Nasdaq composite fell 0.2% to 16,801.54 after setting its latest record.
Indexes were essentially flat early in the day but fell lower after the Federal Reserve released the minutes of its latest policy meeting. They showed Fed officials that it would “likely take longer than previously thought” to fully bring inflation under control after disappointingly high readings early this year.
And while Fed Chairman Jerome Powell said after that meeting that the Federal Reserve would likely cut rates rather than raise them, the minutes said “several participants” were prepared to raise rates if inflation worsens. The cut responded to renewed hopes on Wall Street that the Fed will be able to cut its key interest rate at least once this year.
Lululemon Athletica fell 7.2% after it said its chief product officer, Sun Choe, is leaving the company this month to “pursue a new opportunity.” The company has announced a new organizational structure, where it will not replace the role of Chief Product Officer.
On the bond market, the yield on the 10-year government bond rose from 4.41% at the end of Tuesday to 4.42%. The two-year yield, which is more closely aligned with expectations for the Fed, rose slightly further. It rose from 4.84% to 4.87%.
The fact that the tough statements in the minutes of the Fed's last meeting were dated May 1 helped keep interest rates in check. That was before some reports showed a weakening in inflation and parts of the U.S. economy may have changed. the heads of some Fed officials.
Indeed, in recent speeches since that May 1 meeting, some Fed officials have called these recent reports encouraging. But they have also said they will have to wait months for the numbers to improve before they can cut the federal funds rate, which is at the highest level in more than two decades.
The Fed is trying to walk a tightrope where it slows the economy through high interest rates just enough to control inflation, but not so much that it causes a severe recession.
High rates have made everything more expensive, from credit card bills to car loans. Mortgage rates are also high, and a report on Wednesday showed sales of previously occupied homes last month were weaker than economists expected.
Central banks around the world appear eager to cut rates, but “they may not go far” given how well economies are doing and how high inflation remains, said Athanasios Vamvakidis, a strategist at the Bank of America. He said in a report from BofA Global Research that he expects only superficial interest rate cuts, which could also come later than financial markets seem to predict.
In other trading, U.S. crude fell 57 cents to $77.00 a barrel. Brent crude, the international standard, lost 51 cents to $81.39 a barrel.
The US dollar fell from 156.80 yen to 156.62 Japanese yen. The euro rose from $1.0824 to $1.0830.
