Wall Street's benchmark S&P 500 index edged down 0.1% on Wednesday after data showed the U.S. economy shrank in the first quarter amid high inflation and weakening consumer confidence.
“Equities demand could remain muted for at least the next four to six months as interest rate hikes work through the U.S. economy,” said Stephen Innes of SPI Asset Management in a report. The Nikkei 225 in Tokyo fell 0.9% to 26,651.05 after June industrial production slumped 7.2% compared with the previous month. That was the sharpest decline since the start of the coronavirus pandemic in early 2020.The S&P 500 slipped to 3,818.83 after official data showed economic activity contracted 1.6% at an annualized rate in the three months ending in March. That was the first contraction since the second quarter of 2020 in the depths of the pandemic.
Federal Reserve Chair Jerome Powell, speaking at a European Central Bank meeting in Portugal, said Wednesday there is “no guarantee” inflation can be tamed without hurting the job market.