HONG KONG — Asian markets displayed a mixed performance on Wednesday, influenced by Wall Street’s mostly positive performance as investors await critical U.S. inflation data that could impact the Federal Reserve’s decision on future rate cuts.

Futures in the U.S. and oil prices saw an increase.
In Tokyo, the Nikkei 225 registered a modest gain of 0.1%, closing at 38,444.58.
South Korea’s Kospi experienced a slight alteration, ending the day at 2,496.81 following the arrest of disgraced President Yoon Suk Yeol due to allegations surrounding his controversial martial law declaration from the previous month.
In December, South Korea’s unemployment rate hit 3.7%, a seasonally adjusted figure that marks the highest level since June 2021, largely attributed to ongoing political instability, according to government data.
The Hang Seng index in Hong Kong climbed by 0.2% to finish at 19,263.29, influenced by reports regarding President-elect Donald Trump’s economic team discussing a phased approach to increasing tariffs. On the other hand, the Shanghai Composite fell by 0.4% to 3,227.12.
Shares for companies associated with Xiaohongshu, a Chinese app akin to Instagram, soared after it achieved the top spot on the Apple App Store in the U.S., as users began switching from TikTok amid a potential ban on that platform. Stocks for Foshan Yowant Technology and Inly Media Co., both involved in digital marketing and advertising, surged by approximately 10%.
Australia’s S&P/ASX 200 declined by 0.2% to close at 8,213.30.
In the U.S. market on Tuesday, the S&P 500 ticked up by 0.1% to settle at 5,842.91, with three-quarters of the stocks in the index experiencing gains. The Dow Jones Industrial Average increased by 0.5% to 42,518.28, contrasting with a 0.2% dip for the Nasdaq composite, which ended at 19,044.39.
Market sentiment was buoyed by a report suggesting that wholesale inflation in the U.S. was less severe than anticipated last month. This positive news comes just before a report detailing consumer inflation, particularly regarding prices at gas stations, grocery stores, and auto lots in December.

There remains concern over persistently high inflation readings and a string of positive economic updates in the U.S., which have placed significant pressure on Wall Street, moving it further away from the all-time highs set in the previous year. The worry is that such strong economic data may lead the Federal Reserve to provide less monetary relief through interest rate reductions than previously expected.
The Fed has indicated it is currently contemplating only two rate cuts in 2025, a decrease from its earlier forecast of four. With speculation mounting, there is even discussion about the possibility of no rate cuts occurring this year.
As a result of these uncertainties, Treasury yields have surged in the bond market, applying additional pressure on the equities market. However, yields moderated their upward movement following the wholesale inflation updates.
The yield on the 10-year Treasury maintained at 4.78%, unchanged from late Monday, while it previously fell below 3.65% in September. The two-year Treasury yield, which closely mirrors expectations of Fed actions, eased slightly to 4.36%, down from 4.39%.
Throughout the day, indexes fluctuated between gains and losses largely due to declines in several major tech stocks. Nvidia experienced a 1.1% drop, ranking as the second heaviest downer on the S&P 500.
Eli Lilly was the market’s largest drag, plummeting 6.6% following statements about lower-than-expected revenue for the last quarter of 2024. CEO David Ricks explained that the previous quarter’s 45% revenue growth from their Mounjaro diabetes treatment and related products did not meet projections.
On Wednesday, several major American financial institutions, including JPMorgan Chase and Wells Fargo, are set to reveal their latest financial results as the earnings season approaches. Reports from these companies always attract attention, but there is heightened pressure to perform favorably this time.
Should Treasury yields persist in rising, stock prices will need to drop, or companies will have to deliver greater profit growth to counterbalance the impact.
Additionally, U.S. benchmark crude oil prices increased by 54 cents, reaching $76.91 per barrel, while Brent crude, the international benchmark, also rose by 36 cents to $80.28 per barrel.
In currency exchange, the U.S. dollar fell to 157.23 Japanese yen, down from 158.00. Meanwhile, the euro decreased to $1.0294, down from $1.0309.