Shares are down in most Asian markets ahead of a key US inflation report

The Fearless Girl statue stands in front of the New York Stock Exchange. Shares have advanced in Europe and Asia after a rebound for Nvidia offset weakness on Wall Street

Shares took a tumble in most Asian markets on Thursday, ahead of a crucial US inflation report due Friday that could indicate the future direction of interest rates.

Major indices dropped over 1% in Tokyo, Hong Kong and Sydney. Oil prices and US futures also saw a decline. The main focus for the markets this week is a US government inflation report due Friday.

The personal consumption expenditures index, or PCE, is the Federal Reserve's preferred measure of inflation, and analysts have said investors are adopting a wait-and-see approach following recent mixed data. The latest updates on inflation could sway the central bank's decision on when to start reducing interest rates, which are currently at their highest level in over two decades and are having a global impact.

In Asian trading, another round of measures aimed at boosting the Chinese property market failed to improve market sentiment. Hong Kong's Hang Seng fell 2% to 17,733.76, while the Shanghai composite index was down 0.6% at 2,955.13. The most recent attempt to rejuvenate the property sector came from Beijing, one of China's largest cities, where the capital reduced minimum down-payment ratios and mortgage interest rates, starting Thursday.

Other cities in China have implemented similar measures, in line with national policies designed to lure buyers back into a property market that has been stagnant since the government clamped down on excessive borrowing by property developers. This led to dozens of these companies defaulting on their debts and the downturn has weighed heavily on the entire economy, which is the second largest in the world.

In Tokyo, the Nikkei 225 index fell by 0.8% to 39,341.54 amid concerns over further weakness in the Japanese yen. The US dollar was trading at 160.35 yen early Thursday, having broken through the 160 level a day earlier to its lowest level since 1986.

Japanese officials have warned they may intervene in the market to counter this trend, which has both positive and negative impacts on the economy. Elsewhere in Asia, Australia's S&P/ASX 200 dropped 0.3% to 7,759.60. Taiwan's Taiex fell 0.4% and Bangkok's SET plunged 0.7%.

Shares rose in Mumbai, Jakarta and Singapore. On Wednesday, a mostly subdued day of trading left Wall Street benchmarks close to the all-time highs they achieved last week. The S&P 500 index increased 0.2% to 5,477.90 after fluctuating between minor gains and losses throughout the day. About 65% of the stocks in the benchmark index fell.

The Dow Jones Industrial Average ended less than 0.1% higher, at 39,127.80, while the Nasdaq composite climbed 0.5% to 17,805.16. Several large stocks helped to counterbalance the broader decline in the S&P 500.

Amazon.com saw a 3.9% rise, surpassing the $2 trillion market value for the first time ever. This comes hot on the heels of Nvidia reaching $3trillion, momentarily becoming Wall Street's most valuable company. FedEx managed to balance out the losses with a 15.5% gain. The package delivery giant reported quarterly results that comfortably exceeded predictions.

Rivian, the electric vehicle manufacturer, saw a massive 23.2% surge after Volkswagen announced plans to invest up to $5billion in the struggling firm. Tech giants Apple and Microsoft also saw gains, with Apple rising by 2% and Microsoft by 0.3%. Given their substantial market values, these companies tend to significantly sway the market's direction.

Investors are keeping their fingers crossed that the Federal Reserve will soon start slashing interest rates. However, its mission to bring inflation back down to its 2% target has proven challenging. Wall Street is banking on a rate cut at the central bank's September meeting.

Despite the challenges of inflation and high borrowing costs for consumers and businesses, the economy has remained relatively robust, albeit slowing. Wall Street is hopeful that the Fed can time its rate cuts just right - easing pressure on the economy before it slows too much, but without falling short of its goal to curb inflation.

In other market news, benchmark US crude oil dropped 11 cents to $80.79 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, fell 9 cents to $84.38 per barrel. The euro experienced a slight increase, rising to $1.0696 from $1.0681.