Most Asian stock markets fell on Wednesday because people were worried that the Fed would tighten monetary policy even more. Weaker-than-expected Chinese trade data also made people feel bad.
Tech-heavy Taiwan and Hong Kong stocks did the worst in the region, losing 1.6% and 1.8%, respectively, as investors worried about rising interest rates in the U.S.
The Nikkei 225 in Japan fell 0.5%, and the KOSPI in South Korea fell 1.8%.
Related: Asian stocks fall as Powell, a rate-hike bet enthusiast, drums up speculation.
The mood about Asian markets was hurt by Chinese trade data for August, which was much worse than expected. China’s trade surplus went down by a lot from the month before. Both exports and imports went down by a lot.
The reading comes at a time when the economy has been hit hard by new COVID-related problems and a lack of energy.
But Chinese stocks went against the trend on Wednesday because investors bet that the government would take more steps to boost growth. The Shanghai Composite Index and the blue-chip Shanghai Shenzhen CSI 300 Index both stayed the same.
Beijing recently said that it will spend more on economic stimulus in the third quarter. This is to boost an economy that barely grew from April to June.
The Asian economies that depend on China as a trading partner will be hurt by its weakness. China is a big market for exports from places like Taiwan, Australia, Indonesia, and Singapore.
Major miners BHP Group Ltd (ASX:BHP) and Rio Tinto Ltd (ASX:RIO) were the biggest drags on the S&P/ASX 200 index. China is a big market for iron ore and copper exports from both countries.
Australia’s economy grew a little less than expected in the second quarter, according to data released on Wednesday. This was due to rising inflation and interest rates, which put pressure on the economy.
Broader Asian stocks were also hurt by a rise in the U.S. dollar and Treasury yields. This was because overnight data showed that the U.S. services sector grew faster than expected.
Related: Asian stocks fall as Powell, a rate-hike bet enthusiast, drums up speculation.
The reading shows that the U.S. economy is doing well, which gives the Federal Reserve more room to keep raising interest rates quickly.
Traders now think that there is a more than 70% chance that the Fed will raise interest rates by 75 basis points in September.
