Stock Market Today: Europe Higher, Asia Retreats

Bangkok, May 30 (AP) Shares opened higher in Europe on Thursday after a retreat in Asia as rising bond yields weighed on stock prices.

Germany's DAX edged 0.1per cent higher to 18,486.92 and the CAC 40 in Paris rose 0.3per cent to 7,956.50. Britain's FTSE gained 0.3per cent to 8,204.61.

The future for the S&P 500 was down 0.4per cent while that for the Dow Jones Industrial Average sank 0.8per cent.

With few data releases this week, the biggest factor weighing on stocks has been rising bond yields. By early Thursday, the 10-year yield had risen to 4.62per cent from 4.54per cent late Tuesday, following an auction of $44 billion in seven-year Treasurys.

The 10-year yield has been creeping higher since dropping below 4.40per cent in the middle of May. Higher Treasury yields hurt prices for all kinds of investments.

Asian shares tracked a pullback on Wall Street, with Tokyo's Nikkei 225 benchmark closing down 1.3per cent at 38,054.13.

The Hang Seng in Hong Kong declined 1.3per cent to 18,230.19.

The Shanghai Composite index gave up early gains, losing 0.6per cent to 3,091.68.

Australia's S&P/ASX 200 slipped 0.5per cent to 7,628.20, while the Kospi in Seoul sank 1.6per cent to 2,635.44.

Taiwan's Taiex lost 1.4per cent and India's Sensex was 0.7per cent lower.

This month's swings in bond yields comes as traders recalibrate their expectations for when the Federal Reserve could begin cutting its main interest rate, which is at its highest level in more than two decades.

With inflation stubbornly higher, traders have had to delay their too-optimistic forecasts for rate cuts several times this year.

“Hotter and stickier than expected global inflation appears to be taking the air out of asset markets,” Mizuho Bank said in a commentary. “In other words, “Goldilocks” coming undone. And worries about adverse demand impact from higher rates seeping through,” it said.

On Wednesday, the S&P 500 dipped 0.7per cent, trimming its gain for May, which had been on track to be its best month since November. Four out of every five stocks in the index dropped.

The Dow industrials lost 1.1per cent and the Nasdaq composite slipped 0.6per cent.

The Fed is trying to pull off the balancing act of grinding down on the economy just enough through high interest rates to get inflation fully under control, but not so much that it leads to widespread layoffs.

U.S. stocks have been continuing to set records despite worries about interest rates staying high in part because stocks related to artificial-intelligence technology keep rising. Nvidia's latest blowout profit report helped drive the frenzy even higher. After briefly dipping in morning trading, it rose 0.8per cent Thursday for its most modest gain since its profit report..

In other dealings early Thursday, U.S. benchmark crude oil added 1 cent to $79.22 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the international standard, declined 5 cents to $83.38 per barrel.

The U.S. dollar slipped to 156.93 Japanese yen from 157.65 yen. The euro rose to $1.0818 from $1.0803. (AP)