Asian stock markets opened under pressure on Friday after Wall Street suffered a broad decline in the previous session, as rising US Treasury yields and renewed inflation concerns weighed on investor sentiment. The weakness came as markets continued to assess higher oil prices, geopolitical tensions and the outlook for US monetary policy.
MSCI’s Asia-Pacific equities index excluding Japan fell around 0.2%, tracking losses across major US benchmarks. The S&P 500 dropped 0.9% on Thursday, while the Nasdaq 100 declined 0.7%, extending its losing streak to five sessions. The Dow Jones Industrial Average also fell sharply, losing about 1.3%.
Rising US bond yields pressure global stocks
One of the biggest concerns for investors remains the renewed rise in US Treasury yields. The US 10-year Treasury yield was around 4.7%, while the 30-year yield moved above 5.2%. Higher long-term borrowing costs can put pressure on equity valuations because they make bonds comparatively more attractive and increase financing costs for companies.
The renewed increase in yields also came despite the US Treasury’s move to increase purchases of longer-dated bonds. Investors remain uncertain about whether such measures can provide lasting relief because broader concerns about government borrowing, inflation and fiscal deficits remain unresolved.
The pressure was particularly visible in technology stocks, whose valuations are generally more sensitive to changes in interest rates. The Nasdaq’s decline extended its recent losing streak, adding to concerns that elevated yields could continue weighing on high-growth companies.
Walmart slump adds to Wall Street weakness
Corporate earnings also contributed to Thursday’s decline. Walmart shares suffered their steepest fall since 2022 after the retailer reported disappointing sales-related results, raising questions about the strength of the US consumer amid elevated fuel prices and inflationary pressures.
The weakness in Walmart added to broader concerns about consumer resilience. Investors are watching closely for signs that higher prices and borrowing costs could eventually weaken household spending, which remains an important driver of the US economy.
Dollar slips as investors assess US policy
The US dollar also remained under pressure, with the currency heading toward a weekly decline and trading near a three-month low. Concerns over US fiscal policy, Treasury-market intervention and the future direction of interest rates have contributed to the weaker dollar.
A weaker dollar can provide some relief to emerging-market currencies and companies with significant foreign revenues. However, the benefit can be offset by higher oil prices and rising global borrowing costs.
Oil and geopolitical risks remain in focus
Oil prices remain another major factor for global markets. Brent crude was trading around the low-$90s per barrel after gaining strongly during the week as continuing tensions involving the United States and Iran raised concerns about energy supplies from the Middle East.
Higher crude prices could intensify inflation pressures, particularly in countries that rely heavily on imported energy. For India and other major oil importers, sustained increases in crude prices could raise concerns about inflation, the current-account balance and corporate costs.
Despite the weaker global backdrop, Indian equities had rebounded on Thursday, with the Nifty rising 0.6% and ending a seven-session losing streak. The recovery was helped by easing US bond yields earlier in the week and renewed buying at lower valuations.
However, global markets remain sensitive to movements in bond yields, crude oil and geopolitical developments. Reuters reported that global stocks were heading toward their biggest weekly decline since mid-July, highlighting the broader risk-off environment facing investors.
About The Author
