Shares in Asia opened the week on a mixed note, following a significant dip in U.S. stocks, which experienced their worst losses since Election Day.
In Japan, the Nikkei 225 index fell by 1% to 38,255.65, as the yen strengthened slightly against the U.S. dollar. This was in response to remarks by the Bank of Japan’s Governor Kazuo Ueda, signaling that the central bank will continue raising interest rates as economic conditions allow. The dollar dropped to 154.46 yen from 154.54 yen at the close on Friday, having previously surpassed 156 yen the week before.
Meanwhile, South Korea’s Kospi surged 2% to 2,465.60, buoyed by a significant announcement from Samsung Electronics regarding a share buyback program. The company’s stock jumped 6% in response.
Chinese markets saw positive movements as well. Hong Kong’s Hang Seng gained 1.2%, closing at 19,655.58, while the Shanghai Composite added 1.2% to reach 3,372.18. Economists attributed the retail spending growth reflected in recent data to the government’s economic stimulus measures, which appear to be stabilizing the country’s economic slowdown.
Other Asian markets were also mixed. Australia’s S&P/ASX 200 inched up 0.1% to 8,295.40, while Taiwan’s Taiex fell by 0.8% and Thailand’s SET index rose by 0.6%.
In the U.S., stocks tumbled on Friday, reversing the post-Election Day gains that had previously buoyed Wall Street. The S&P 500 dropped 1.3% to 5,870.62, marking its worst performance since before the election and closing a losing week. The Dow Jones Industrial Average lost 0.7%, closing at 43,444.99, while the Nasdaq Composite dropped 2.2% to 18,680.12.
Vaccine companies were among the biggest losers on Friday, as concerns grew about President-elect Donald Trump’s potential appointment of Robert F. Kennedy Jr., a vocal anti-vaccine advocate, as head of the Department of Health and Human Services. Moderna saw a sharp 7.3% drop, while Pfizer fell 4.7% on fears that Kennedy’s appointment could harm profits.
While Kennedy still requires Senate confirmation for the position, some analysts are doubtful that he will secure it.
The biotechnology sector saw widespread losses, with Applied Materials experiencing the steepest decline in the S&P 500, falling 9.2%. The company had reported a stronger-than-expected quarterly profit, but its revenue forecast for the future fell short of analyst expectations. With stock prices rising much faster than corporate earnings, companies are under increasing pressure to deliver substantial growth, leading some investors to reevaluate the market’s current valuation.
Despite the recent decline, the S&P 500 is still up 23% for the year, approaching its all-time high set just days earlier.
Markets had surged after Trump’s Election Day victory, with investors betting on the potential benefits of his policies, such as lower taxes, deregulation, and higher tariffs. However, concerns are growing about the potential downsides of his return to the White House, including the possibility of ballooning U.S. government deficits and rising inflation. These worries have led traders to reassess the Federal Reserve’s future interest rate policy.
The Fed recently lowered interest rates for the second time this year, and initial projections indicated further cuts through 2025. However, Federal Reserve Chair Jerome Powell cautioned on Thursday that the economy does not show signs of requiring immediate rate cuts, leaving future decisions uncertain. Powell also refrained from discussing how Trump’s policies might influence those decisions.
On the economic front, a report on Friday showed that U.S. retail sales exceeded expectations, pointing to resilient consumer spending, which remains a key driver of economic activity.
In early trading on Monday, U.S. benchmark crude oil rose by 17 cents to $67.19 per barrel on the New York Mercantile Exchange, while Brent crude gained 29 cents to $71.33 per barrel.
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