TOKYO (AP) — Global shares declined Tuesday as worries over inflation tempered optimism over President Joe Biden’s remark that he was considering reducing U.S. tariffs on Chinese imports.
European shares fell in early trading, with France's CAC 40 down 1.3% at 6,275.73. Germany's DAX dipped nearly 1.0% to 14,038.93, while Britain's FTSE 100 shed 0.7% to 7,460.16. The future for the Dow industrials was 0.8% lower while the S&P 500 future slipped 1.3%.
On Monday, the S&P 500 jumped 1.9%, the Dow Jones Industrial Average rose 2% and the Nasdaq climbed 1.6%. The Russell 2000 gained 1.1%.
Biden, who announced a new economic and trade initiative with the region while on a visit to Japan, confirmed to reporters that he planned to discuss the issue of punitive tariffs imposed on China during former President Donald Trump's administration with Treasury Secretary Janet Yellen once he returns to Washington.
“I'm talking with the secretary when I get home. We are considering it," Biden said.
The comments raised optimism over the potential for an easing of tensions between the world's two biggest economies, but not all were convinced.
“Talks of reducing tariffs on China’s exports have surfaced before and the lack of any concrete follow-through remains an element of disappointment for markets," said Yeap Jun Rong, market strategist at IG in Singapore.
Biden joined leaders of Japan, Australia and India in Tokyo for a summit of the “Quad,” or the Quadrilateral Security Dialogue, where Biden made the case that the world has a shared responsibility to do something to assist Ukrainian resistance against Russia’s aggression. The summit came on the final day of Biden’s first trip to Asia as president.
Investors are keeping an eye on the impact of the war in Ukraine on commodity prices and the possible blow to global economic growth from pandemic lockdowns in China.
Japan's benchmark Nikkei 225 lost 0.9% to 26,748.14. Australia's S&P/ASX 200 slipped 0.3% to 7,128.80 and South Korea's Kospi sank 1.6% to 2,605.87. Hong Kong's Hang Seng shed 1.8% to 20,112.10, while the Shanghai Composite declined 2.4% to 3,070.93.
Investors fear the U.S. central bank could go too far in raising rates or move too quickly. That could slow business activity and potentially bring on a recession. On Wednesday, investors will get a more detailed glimpse into the Fed’s decision-making process with the release of minutes from the latest policy setting meeting.
Technology shares that gained hugely during the pandemic are now taking the brunt of selling thanks to their hefty prices. Casting a shadow, social media and camera maker Snap Inc. surprised investors with a warning late Monday.
“Snap’s stock price went snap, crackle, pop, as it fell by over 30% in extended trading after the CEO, in a note to employees, said it would miss quarterly guidance on growth and revenues," Jeffrey Halley of Oanda said in a commentary.
In premarket trading Snap's shares were down 28% at $22.47 early Tuesday.
Wall Street will get a few economic updates this week from the Commerce Department. On Thursday it will release a report on first-quarter gross domestic product and on Friday it will release data on personal income and spending for April.
In energy trading, U.S. benchmark crude lost 75 cents to $109.54 a barrel in electronic trading on the New York Mercantile Exchange. It added 1 cent to $110.29 per barrel on Monday. Brent crude, the international standard for pricing, fell 83 cents to $112.59 a barrel.
In currency trading, the U.S. dollar edged down to 127.37 Japanese yen from 127.78 yen. The euro cost $1.0717, up from $1.0688.