Shares were mostly higher in Asia on Thursday after a wobbly day of trading yielded modest gains on Wall Street.
U.S. futures inched up while oil prices were mixed.
Shanghai’s benchmark lost 1% to 3,204.93 after China’s central bank left its benchmark lending rate unchanged. While other major economies are raising rates to cool inflation, China’s economy has been slowing and inflation remains moderate.
Tokyo’s Nikkei 225 index gained 0.5% to 27,946.20. Japan reported a record trade deficit for the month of August, driven by high costs for imports of energy and other commodities and a weak yen.
But analysts said they expect a rebalancing in coming months.
An employee of a bank walks near the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between the U.S. dollar and the South Korean won at a foreign exchange dealing room in Seoul, South Korea, Wednesday, Sept. 14, 2022. Asian markets have skidded lower after Wall Street fell the most since June 2020 as a report showed inflation has kept a surprisingly strong grip on the U.S. economy. (AP Photo/Lee Jin-man)
Photo: ASSOCIATED PRESS/Lee Jin-man
Currency traders watch computer monitors near the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between the U.S. dollar and the South Korean won at a foreign exchange dealing room in Seoul, South Korea, Wednesday, Sept. 14, 2022. Asian markets have skidded lower after Wall Street fell the most since June 2020 as a report showed inflation has kept a surprisingly strong grip on the U.S. economy. (AP Photo/Lee Jin-man)
Photo: ASSOCIATED PRESS/Lee Jin-man
An employee of a bank walks at a foreign exchange dealing room in Seoul, South Korea, Wednesday, Sept. 14, 2022. Asian markets have skidded lower after Wall Street fell the most since June 2020 as a report showed inflation has kept a surprisingly strong grip on the U.S. economy. (AP Photo/Lee Jin-man)
Photo: ASSOCIATED PRESS/Lee Jin-man
A currency trader watches computer monitors near the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between the U.S. dollar and the South Korean won at a foreign exchange dealing room in Seoul, South Korea, Wednesday, Sept. 14, 2022. Asian markets have skidded lower after Wall Street fell the most since June 2020 as a report showed inflation has kept a surprisingly strong grip on the U.S. economy. (AP Photo/Lee Jin-man)
Photo: ASSOCIATED PRESS/Lee Jin-man
Traders work on the floor of the New York Stock Exchange on Tuesday, Sept. 13, 2022. The stock market fell the most since June 2020, with the Dow loosing more than 1,250 points. (AP Photo/Julia Nikhinson)
Photo: ASSOCIATED PRESS/Julia Nikhinson
A currency trader watches computer monitors near the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at a foreign exchange dealing room in Seoul, South Korea, Thursday, Sept. 15, 2022. Shares were mostly higher in Asia on Thursday after a wobbly day of trading yielded modest gains on Wall Street. (AP Photo/Ahn Young-joon)
Photo: ASSOCIATED PRESS/Ahn Young-joon
A currency trader watches computer monitors near the screens at a foreign exchange dealing room in Seoul, South Korea, Thursday, Sept. 15, 2022. Shares were mostly higher in Asia on Thursday after a wobbly day of trading yielded modest gains on Wall Street. (AP Photo/Ahn Young-joon)
Photo: ASSOCIATED PRESS/Ahn Young-joon
A currency trader watches computer monitors near the screens showing the foreign exchange rates at a foreign exchange dealing room in Seoul, South Korea, Thursday, Sept. 15, 2022. Shares were mostly higher in Asia on Thursday after a wobbly day of trading yielded modest gains on Wall Street. (AP Photo/Ahn Young-joon)
Photo: ASSOCIATED PRESS/Ahn Young-joon
Currency traders watch computer monitors near the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at a foreign exchange dealing room in Seoul, South Korea, Thursday, Sept. 15, 2022. Shares were mostly higher in Asia on Thursday after a wobbly day of trading yielded modest gains on Wall Street. (AP Photo/Ahn Young-joon)
Photo: ASSOCIATED PRESS/Ahn Young-joon
A trader looks over his cell phone outside the New York Stock Exchange, Wednesday, Sept. 14, 2022, in the financial district of Manhattan in New York. Stocks edged higher in afternoon trading on Wall Street Wednesday following the market’s worst day in two years on fears about higher interest rates and the recession they could create. (AP Photo/Mary Altaffer)
Photo: ASSOCIATED PRESS/Mary Altaffer
Security personnel stand guard outside the New York Stock Exchange, Wednesday, Sept. 14, 2022, in the financial district of Manhattan in New York. Stocks edged higher in afternoon trading on Wall Street Wednesday following the market’s worst day in two years on fears about higher interest rates and the recession they could create. (AP Photo/Mary Altaffer)
Photo: ASSOCIATED PRESS/Mary Altaffer
“Motor vehicle production should continue to normalize as supply chain disruptions ease, while commodity price growth has eased even further,” Darren Tay of Capital Economics said in a commentary.
In Hong Kong, the Hang Seng index was 0.5% higher, at 18,941.04, while the Kospi in Seoul edged 0.1% higher to 2,413.07.
Australia’s S&P/ASX 200 added 0.6% to 6,869.60.
Trading was tentative in New York on Wednesday, a day after the market’s worst drop in two years, which was set off by fears that higher interest rates could cause a recession.
A report on inflation at the wholesale level showed prices are still rising rapidly, with pressures building underneath the surface, even if overall inflation slowed. It echoed a report on inflation at the consumer level Tuesday, which raised expectations for interest-rate hikes and triggered a rout for markets.
The S&P 500 added 0.3% Wednesday to 3,946.01, while the Dow inched 0.1% higher, to 31,135.09. The Nasdaq gained 0.7% to 11,719.68, and the Russell 2000 picked up 0.4% to close at 1,838.46.
Traders now see a one-in-four chance the Fed may hike its benchmark rate by a full percentage point next week, quadruple the usual move, according to CME Group. A day earlier, it was closer to a one-in-three chance. The site puts the probability of a three-quarter percentage point increase now at 76%, up from 69% on Tuesday.
The central bank has already raised its benchmark interest rate four times this year, with the last two increases by three-quarters of a percentage point.
The Fed is taking the aggressive action on interest rates to try and cool the hottest inflation in four decades. Tuesday’s report on high prices jolted the market with signs that inflation is entering a more stubborn phase that could require an already resolute Fed to become more aggressive.
Wall Street is especially worried that the rate hikes could go too far in slowing the economy and send it into a recession. The Fed is trying to avoid that outcome, but the latest inflation reports suggest that is becoming a more difficult task.
The broader U.S. economy has been slowing, but consumers have remained resilient and the job market remains strong. Wall Street will get another update on inflation’s latest impact on spending when the government releases its retail sales report for August on Thursday.
The market is also monitoring U.S.-China tensions and war in Ukraine, while business and government officials are bracing for the possibility of a nationwide rail strike at the end of this week that could paralyze an already discombobulated supply chain.
The railroads have already started to curtail shipments of hazardous materials and have announced plans to stop hauling refrigerated products ahead of Friday’s strike deadline. Businesses that rely on Norfolk Southern, Union Pacific, BNSF, CSX, Kansas City Southern and other railroads to deliver their raw materials and finished products are planning for the worst.
Union Pacific fell 3.7% and Norfolk Southern fell 2.2%.
Biden administration officials are scrambling to develop a plan to keep goods moving if the railroads shut down. The White House is also pressuring the two sides to settle their differences, and a growing number of business groups are lobbying Congress to be prepared to intervene and block a strike if they can’t reach an agreement.
In other trading Thursday, U.S. benchmark crude oil gained 10 cents to $88.58 per barrel in electronic trading on the New York Mercantile Exchange. It jumped $1.17 to $88.48 on Wednesday.
Brent crude, the pricing basis for international trading, slipped 5 cents to $94.05 per barrel.
The dollar rose to 143.42 Japanese yen from 143.16 yen late Wednesday. The euro weakened to 99.73 cents from 99.77 cents.
Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
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