BEIJING — Asian markets slumped on Friday, with Hong Kong's benchmark down nearly 2%, after a range of indicators on the U.S. economy dashed hopes that interest rate easing would come soon.
Oil prices and US futures fell.
Tokyo's Nikkei Stock Average fell 0.3% to $38,707.64, while South Korea's Kospi fell 1.9% to $2,666.84.
Hong Kong's Hang Seng fell 1.7% to 16,676.70 on reports that house prices have continued to decline since February.
The Shanghai Composite Index rose 0.3% to 3,055.16, while the S&P/ASX 200 Index fell 0.9% to 7,670.30.
U.S. stocks fell on Thursday, with the S&P 500 index down 0.3% to 5,150.48, but still close to its all-time high set on Tuesday. The Dow Jones Industrial Average fell 0.4% to $38,905.66, and the Nasdaq Composite Index fell 0.3% to $16,128.53.
The move was more decisive in the bond market, where U.S. Treasury yields rose after reports that inflation last month was slightly higher at the wholesale level than economists expected. It was the latest in a series of inflation statistics that were worse than expected, ending earlier hopes that the Federal Reserve could start cutting interest rates at next week's meeting. It remains as it is.
But other reports released Thursday also showed some softening in the economy, sustaining hopes that inflation will continue its long-term downward trend.
The question hanging over Wall Street is how long the latest signs of potentially stubborn inflation will ultimately delay rate cuts. That could damage the strong rally in U.S. stocks, which have risen in 16 of the past 19 weeks since late October.
Fed officials are expected to release their latest forecast on Wednesday about where they think interest rates will go this year after their latest policy meeting.
The data they will consider includes a report on Thursday that said shoppers spent less at U.S. retailers last month than economists expected. Such data will weigh on the broader economy, but it could also remove upward pressure on inflation.
The government also announced that retail sales in January were weaker than originally expected. Robust spending by U.S. households is one of the keys to keeping the economy from recession despite high interest rates.
Fewer U.S. workers than expected applied for unemployment benefits last week, according to a separate report. This is good news for workers in general. However, if the job market, which has remained remarkably resilient, becomes too strong, upward pressure on inflation could increase.
The yield on the 10-year U.S. Treasury rose to 4.28% from 4.19% late Wednesday on mixed data. The two-year bond yield, which more accurately reflects expectations for the Fed, rose to 4.69% from 4.63%.
On Wall Street, Dollar General's shares soared even as it reported better-than-expected profits and revenue for its latest quarter. The company's stock, which had previously risen more than 6%, fell 5.1%.
Dollar General executives said inflation is causing customers to move away from non-essential items and name brands and make trade-offs in the aisles. Shares plunged a day earlier after rival Dollar Tree reported weaker-than-expected financial results and announced it would close hundreds of Family Dollar stores.
Dick's Sporting Goods rose 15.5% after the company reported better-than-expected profits for its latest quarter and announced a dividend increase.
Robinhood Markets rose 5.2% last month as stock and cryptocurrency prices near record levels and strong growth in customer trading activity.
U.S. Steel fell 6.4% after President Joe Biden expressed opposition to a planned sale of the company to Nippon Steel.
In December, Nippon Steel announced plans to buy the Pittsburgh-based steelmaker for $14.1 billion in cash, raising questions about how the deal would affect unionized workers, the supply chain and U.S. national security. There are growing concerns about the impact it will have.
U.S.-traded Anheuser-Busch InBev shares fell 5.5% after Altria announced it would sell some of its stake in the Budweiser maker.
Homebuilder Lennar fell 7.6% as sales fell short of analysts' expectations despite reporting better-than-expected profit growth.
In other trading early Friday, benchmark U.S. crude oil fell 15 cents to $81.11 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose 16 cents to $85.26 a barrel.
The dollar fell to 148.19 yen from 148.32 yen. The euro fell to $1.0880 from $1.0884.