Asian shares took a hit on Tuesday as Wall Street’s slump and rising U.S. bond yields put pressure on stocks across the region. The Shanghai Composite index dropped 1.7% despite China’s economy growing at a faster-than-expected rate in the first quarter.
In Tokyo, the Nikkei 225 fell 1.9% as the dollar continued to strengthen against the yen, reaching 34-year highs. The euro also slipped against the dollar, reflecting the broader market trend.
South Korea’s Kospi and Australia’s S&P/ASX 200 also saw declines, mirroring the negative sentiment in the region. The overall market sentiment was impacted by the S&P 500’s 1.2% drop on Monday, following a 1.6% loss the previous week.
The market volatility was driven by a mix of factors, including rising Treasury yields and concerns about inflation. Strong economic reports, like the one showing increased consumer spending in the U.S., have raised expectations for fewer interest rate cuts by the Federal Reserve.
Tech stocks, which have benefited from low interest rates, were among the hardest hit, with companies like Apple, Nvidia, and Microsoft seeing significant declines. The pressure is now on companies to deliver strong earnings amid a less supportive interest rate environment.
In the oil market, prices remained volatile as political tensions in the Middle East added to concerns about inflation. The overall economic outlook remains uncertain, with investors closely watching for any signs of further market turbulence.