Stock market today: Asian shares mixed after AI hopes nudge Wall St to records. BOJ stands pat

By YURI KAGEYAMA
AP Business Writer

TOKYO (AP) — Asian shares were mixed in muted trading Friday after Wall Street’s continued frenzy around artificial-intelligence technology nudged indexes on Wall Street to more records.

Japan’s benchmark Nikkei 225 jumped 0.7% to 38,998.04 after the Bank of Japan kept its monetary policy intact, though it did say it intends to begin reducing its government bond purchases as it eases itself out of its ultra-lax stance.

“Even if the BOJ wants to convey that the direction of travel is for tightening, the key guiding principle is gradualism,” Tan Jing Yi at Mizuho Bank said in a commentary.

Australia’s S&P/ASX 200 fell 0.3% to 7,723.30. South Korea’s Kospi edged up 0.1% to 2,758.21. Hong Kong’s Hang Seng slipped 0.7% to 17,988.24, while the Shanghai Composite fell 0.2% to3,021.88.

On Thursday, the S&P 500 added 0.2% to its all-time high set the day before, closing at 5,433.74, even though the majority of its stocks weakened. The Nasdaq composite climbed 0.3% from its own record, ending at 17,667.56, thanks to gains for technology stocks.

The Dow Jones Industrial Average fell 0.2% to 38,647.10.

Treasury yields eased again in the bond market as traders grew convinced that inflation is slowing enough to get the Federal Reserve to cut interest rates later this year.

The latest update on inflation showed prices paid at the wholesale level weren’t as bad as economists expected. They actually dropped from April into May, when economists were forecasting a rise.

That followed a surprising update from Wednesday that showed inflation at the consumer level was lower than expected. Federal Reserve Chair Jerome Powell called that report encouraging and said policymakers need more such data before lowering their main interest rate from the most punishing level in two decades.

“It’s a question of when they cut, not if,” said Niladri “Neel” Mukherjee, chief investment officer of TIAA Wealth Management.

High interest rates have been dragging on some parts of the economy, particularly manufacturing. A separate report on Thursday showed more U.S. workers filed for unemployment benefits last week than economists expected, though the number is still low relative to history.

The hope on Wall Street is that growth for the job market and economy continues to slow in order to take pressure off inflation, but not so much that it creates a deep recession.

Companies whose profits are most closely tied to the strength of the economy lagged the market Thursday following the reports, such as oil-and-gas producers and industrial companies.

Dave & Buster’s Entertainment sank 10.9% after reporting worse drops in profit and revenue for the latest quarter than analysts expected, citing a “complex macroeconomic environment” among other reasons.

Other companies have recently been detailing a split among their customers, where lower-income households are struggling to keep up with still-high inflation.

Some companies have been able to skyrocket regardless of the pressures on the economy because of an ongoing frenzy around artificial-intelligence technology.

Broadcom jumped 12.3% after the semiconductor company reported stronger profit for the latest quarter than analysts expected, aided once again by AI demand. It also raised its forecast for revenue this year.

Tesla rose 2.9% after CEO Elon Musk said early voting results indicated shareholders were leaning toward approving his pay package. Without it, Musk had threatened to take AI research to one of his other companies.

In the bond market, the yield on the 10-year Treasury fell to 4.24% from 4.32% late Wednesday and from 4.60% late last month. The two-year yield, which moves more on expectations for the Fed, fell to 4.69% from 4.76%.

Most Fed officials are penciling in either one or two cuts to interest rates this year, and traders are hopeful they can begin as soon as September.

In other dealings, benchmark U.S. crude shed 44 cents to $78.18 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, lost 36 cents to $82.39 a barrel.

The U.S. dollar rose to 157.82 Japanese yen from 157.02 yen. The euro cost $1.0742, little changed from $1.0739.

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AP Business Writer Stan Choe contributed.