Wall Street fell Wednesday as Wall Street was followed by Asian stock markets.
The market benchmarks for Seoul, Hong Kong, and Tokyo declined. Shanghai fluctuated between gains and losses.
Wall Street’s benchmark S&P 500 index fell overnight after the Institute of Supply Management reported that June saw a slower growth rate in service industry activity than expected.
Mizuho Bank reported that the “disappointing fall” indicates that the U.S. economy is not immune to the global coronavirus resurgence.
The Nikkei225 in Tokyo fell 1% to 28,363.82 while the Hang Seng in Hong Kong dropped 0.7% to 27,881.92.
After China’s Cabinet declared that it will impose stricter data security standards on Chinese companies who want to be a part of foreign stock exchanges, the Shanghai Composite Index rose 0.2% to 3,535.34 by mid-morning.
This announcement comes at a time when Beijing tightens control over the technology industry. It could be a problem for Chinese entrepreneurs who have raised billions abroad. This announcement comes after Didi Global Inc., a ride-hailing company, was told to stop signing up new customers and remove its app form online stores. It also increases security for customer data.
The Kospi in Seoul fell 0.6% to 3,287.11 while in Sydney, the S&P ASX 200 gained 0.7% to 7,316.00
New Zealand, Singapore, and Jakarta all declined.
Wall Street saw the S&P lose 0.2% to 4,343.54 Tuesday. This was due to losses by banks and energy companies. The year-to-date index is up 15.6%
The Dow Jones Industrial Average declined 0.6% to 34,577.37. The Nasdaq Composite rose 0.2%, to 14,663.64.
On a 100-point scale, numbers above 50 indicate activity increasing. The ISM purchasing manager’s index dropped to 60.1 in June from May’s record 64.0. This was significantly lower than the 63.3 forecasters expected, according to The Wall Street Journal.
As U.S. consumer restrictions ease, the U.S. has seen a rise in travel and hospitality services.
This pushed up U.S. price but the Federal Reserve could now support its position that the inflation spike was temporary. Investors could be reassured that the Fed and other central bank members won’t be under any pressure to reduce price increases by reducing economic stimulus.
Didi shares also fell 19.6% in New York on Tuesday. This follows a 5.5% drop in Didi shares on Friday, when Chinese regulators stated that they were investigating Didi and two other ride-tech companies for information security. Full Truck Alliance, which operates two truck logistics platforms lost 6.7%, while Kanzhun Ltd. dropped 15.9%. Kanzhun Ltd. is an online recruitment company.
Amazon shares rose 4.7% following the Pentagon’s announcement that it is cancelling a cloud computing contract with Microsoft. This contract could have been worth $10B. Instead, it will pursue a deal between Microsoft and Amazon. Microsoft shares did not change.
Energy markets saw benchmark crude oil lose 14 cents to $73.23 a barrel in electronic trading at the New York Mercantile Exchange. On Tuesday, the contract dropped $1.79 to $73.37. Brent crude oil, which is used to price international oils, fell 30 cents to $74.23 per barrel in London. It dropped $2.63 to $74.53 from the previous session.
From Tuesday’s 110.63, the dollar fell to 110.60 yen. From $1.1826, the euro fell to $1.1824.