Stock market today: World stocks retreat as Middle East tensions flare

A police officer rides a bicycle past an electronic stock board showing Japan’s Nikkei 225 index at a securities firm Friday, April 19, 2024, in Tokyo. Asian markets tumbled Friday, with Japan’s benchmark Nikkei 225 down more than 3% on heavy selling of semiconductor-related shares.(AP Photo/Eugene Hoshiko)

HONG KONG (AP) — European markets opened lower and Asian stocks tumbled Friday, with Japan’s Nikkei slumping 2.7% on heavy selling of semiconductor-related shares and other market heavyweights.

Tensions in the Middle East were weighing on sentiment, with the future for the S&P 500 down 0.6% and that for the Dow Jones Industrial Average falling 0.5%.

A person stands in front of an electronic stock board showing Japan’s Nikkei 225 index at a securities firm Friday, April 19, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)

Oil prices jumped early Friday after the state-run IRNA news agency reported that Iran fired air defense batteries early Friday morning and there were reports of explosions near the city of Isfahan. But they had given up most of those gains by early morning, European time.

A person looks at an electronic stock board showing Japan’s Nikkei 225 index at a securities firm Friday, April 19, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)

Germany’s DAX lost 1.1% to 17,647.83 and the CAC 40 in Paris slipped 0.8% to 7,957.40. In London, the FTSE 100 was 0.6% lower, at 7,833.74.

Japan’s benchmark Nikkei 225 lost 2.7% to 37,068.35, paring losses in the early trading when it plunged 3.5%.

Semiconductor equipment supplier Lasertec was the largest loser, which lost 8.4%. But most other big tech-related shares also dropped. Renesas gave up 6%, Tokyo Electron lost 8.7% and Sony Group Corp. declined 1.8%.

Toyota Motor Corp was down 2.2%.

Japan’s headline inflation rate slowed to 2.7% in March, the government reported, while the core-core index, excluding fresh food and energy costs, moderated to 2.9%, marking the first time since November 2022 that it fell below 3%.

The yen was slightly firmer against the U.S. dollar, with the latter falling to 154.47 Japanese yen from 154.64 yen.

Markets are waiting for the Japanese central bank’s next move after it raised its benchmark interest rate last month for the first time in 17 years, ending a longstanding policy of negative rates meant to boost the economy. But the rate remains near zero.

Elsewhere, Australia’s S&P/ASX 200 dipped 1% to 7,567.30. South Korea’s Kospi dropped 1.6% to 2,591.86. Hong Kong’s Hang Seng declined 0.9% to 16,231.40, while the Shanghai Composite was 0.3% lower to 3,065.26. Taiwan’s Taiex slumped 3.8%, with Taiwan Semiconductor Manufacturing Co shares tumbling 6.7%.

Overnight on Wall Street, the S&P 500 fell 0.2% to 5,011.12 after flipping between small gains and losses through the day. The drop was slight, but it was still enough to send the index to a fifth straight loss. That’s its longest losing streak since October, and it’s sitting 4.6% below its record set late last month.

A person looks at an electronic stock board showing Japan’s Nikkei 225 index at a securities firm Friday, April 19, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)

The Dow Jones Industrial Average edged up 0.1% to 37,775.38, and the Nasdaq composite slipped 0.5% to 15,601.50.

Stocks have been struggling recently as yields in the bond market charge higher. They’re cranking up the pressure because investors have largely given up on hopes that the Federal Reserve will deliver many cuts to interest rates this year.

A person looks at an electronic stock board showing Japan’s Nikkei 225 index at a securities firm Friday, April 19, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)

Yields climbed a bit higher after more reports on Thursday showed the U.S. economy remains stronger than expected.

One report said fewer workers applied for unemployment benefits last week than economists expected in the latest sign that the job market remains solid despite high interest rates.

Another report on Thursday said growth in manufacturing in the mid-Atlantic region accelerated sharply, when economists were expecting a contraction.

People walk in front of an electronic stock board showing Japan’s Nikkei 225 index at a securities firm Friday, April 19, 2024, in Tokyo. Asian markets tumbled Friday, with Japan’s benchmark Nikkei 225 down more than 3% on heavy selling of semiconductor-related shares.(AP Photo/Eugene Hoshiko)

A third report said sales of previously occupied U.S. homes didn’t fall by quite as much last month as economists expected.

A person walks in front of an electronic stock board showing Japan’s Nikkei 225 index at a securities firm Friday, April 19, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)

Similar data, along with a string of reports showing inflation has remained hotter than forecast this year, have pushed top Fed officials to say recently they could hold interest rates high for a while.

The New York Stock Exchange is seen, through a window guard, on Tuesday, April 16, 2024 in New York. Wall Street drifted toward gains as more corporate earnings come in, giving investors a break from fretting about if and when the Federal Reserve might cut interest rates. (AP Photo/Peter Morgan)

That’s a letdown after the Fed earlier had signaled three cuts to interest rates could be possible this year. But Fed officials have been adamant they want to be sure inflation is heading down toward their 2% target before lowering the Fed’s main interest rate from its highest level since 2001.

In oil trading, U.S. benchmark crude rose was trading 11 cents higher at $82.22 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, gained 7 cents to $87.18 per barrel.

The euro rose to $1.0654 from $1.0644.