Hong Kong's Hang Seng sank 2% to 18,739.03 as investors fretted over the trajectory for China's economic recovery after the government relaxed pandemic restrictions late last year. The Shanghai Composite index also fell, by 0.5% to 3,188.34.
Taiwan's benchmark Taiex jumped 0.8% on gains for major computer chip makers. Taiwan Semiconductor Manufacturing Co., the world's largest, surged 3.4%. The U.S. government could run out of cash to pay its bills as soon as June 1 unless Congress allows it to borrow more. The widespread belief on Wall Street is that Congress will come to an agreement at the 11th hour, as it's done several times before, because a default would benefit no one and could cause tremendous disruptions to the economy and financial markets.
The stock market has remained mostly resilient despite the worries. Fear has so far been concentrated in the bond market, where prices have dropped for Treasury bills due to pay out around the date of a possible default. Traders are hopeful just one more hike may be on the way this summer, if any at all. Federal Reserve officials were divided earlier this month on whether to pause their rate hikes at their upcoming meeting in June, according to the minutes of their latest meeting.