SINGAPORE (Reuters) – Wall Street and Asian stock markets declined on Tuesday following expectations of further US interest rate hikes while oil prices regained some strength. Morgan Stanley Capital International’s (MSCI) broad Asia-Pacific index outside Japan fell 0.5%, while Japan’s Nikkei 225 lost 0.6%. South Korea’s KOSPI dropped 2%, although Taiwanese stocks rose 0.9% to a new high.
Market sentiment remained cautious after Wall Street closed lower overnight, with technology stocks weighing on major U.S. indexes. Investors are increasingly expecting the Federal Reserve to adopt a more aggressive stance against inflation, with markets pricing in a 54% chance of at least two interest rate hikes before the end of the year.
Brent crude oil gained 0.2% to $78.03 per barrel after a sharp decline in the previous session, as concerns over supply eased after the US waived sanctions on Iran for 60 days and the Strait of Hormuz opened.
In currency markets, the Japanese yen The U.S. dollar index, which measures the greenback's strength against a basket of six currencies, was trading at 101.04, close to its highest since May last year. remained near its weakest level in 40 years against the U.S. dollar. Japan’s Finance Minister Satsuki Katayama held talks with U.S. Treasury Secretary Scott Bessent amid concerns over currency volatility.
Meanwhile, The U.S. dollar index was trading at 101.04, close to its highest since May last year. Gold and major cryptocurrencies, including bitcoin and ether, recorded modest losses.