Global Markets Slide as Investors Brace for U.S. Jobs and Inflation Data

BY EMMANUEL OGBONNA

Share markets across Asia fell sharply on Tuesday, while U.S. stock futures also moved lower, as investors pulled back ahead of key American employment and inflation reports that are expected to influence the outlook for interest rates and global financial conditions.

In Japan, the Nikkei 225 dropped 1.6% to 49,383.29, weighed down by signs of slowing momentum in the manufacturing sector. Preliminary factory data showed activity continued to contract, even as conditions improved modestly. The S&P Global Flash purchasing managers’ index for Japan rose to 49.7 in December from 48.7 in November, remaining just below the 50-point threshold that separates expansion from contraction.

Markets in Japan are especially sensitive this week as investors position themselves ahead of a closely watched Bank of Japan policy meeting scheduled for Friday. The central bank is widely expected to raise interest rates, a move that could ripple through global bond markets and affect currencies and cryptocurrencies that have benefited from Japan’s long-standing ultra-loose monetary policy.

Chinese markets also moved lower after a batch of November economic data disappointed expectations. Retail sales grew just 1.3% from a year earlier, marking the slowest pace since the depths of the pandemic in 2022. Figures on lending and fixed-asset investment also showed weakening trends, reinforcing concerns that the world’s second-largest economy is losing steam as the year draws to a close.

“Overall, the data confirms a loss of momentum into year-end and is consistent with our growth forecasts moderating to around 4% in the final quarter,” said Tan Boon Heng of Mizuho Bank in a research note.

Hong Kong’s Hang Seng index slid 1.6% to 25,211.24, while mainland China’s Shanghai Composite fell 1.1% to 3,825.71. Technology stocks were among the biggest drags across the region. In South Korea, the Kospi tumbled 2.2% to 3,000.13 as chipmakers came under heavy selling pressure. SK Hynix sank 4.3%, while Samsung Electronics dropped 1.9%. Taiwan’s Taiex declined 1.1%, and Australia’s S&P/ASX 200 lost 0.4% to 8,598.90.

In corporate news, shares of iRobot plunged another 9.3% in after-hours U.S. trading after the company filed for Chapter 11 bankruptcy protection. The move followed a nearly 73% collapse in the stock on Monday. The maker of Roomba robotic vacuum cleaners has struggled amid intensifying competition and weakening demand, but said its restructuring and plan to go private are not expected to disrupt existing products or services.

Wall Street closed mostly lower on Monday, setting a cautious tone for the week. The S&P 500 edged down 0.2%, even though most of its components finished higher. The Dow Jones Industrial Average slipped 0.1%, while the Nasdaq composite fell 0.6%, weighed down by renewed weakness in technology shares.

Artificial intelligence-related stocks, which have driven much of the market’s gains this year, were mixed and helped cap broader losses. Nvidia, the chipmaker closely associated with the AI boom, rose 0.7%. Oracle, however, slid another 2.7%, extending last week’s steep decline, while Broadcom fell 5.6%. Investors have grown increasingly wary that the massive sums being poured into chips, data centers and AI infrastructure may not generate returns quickly enough to justify current valuations.

Attention on Wall Street is now firmly focused on a series of high-profile U.S. economic releases. Economists expect Tuesday’s employment report to show that job gains exceeded job losses by about 40,000 in November, signaling continued cooling in the labor market. On Thursday, a key inflation report is forecast to show consumer prices rose 3.1% from a year earlier.

Investors are hoping for a delicate balance: a job market that slows enough to persuade the Federal Reserve to cut interest rates, but not so sharply that it pushes the economy toward recession. Lower rates typically support borrowing, spending and asset prices, but they also risk reigniting inflation if eased too soon.

The unemployment rate is expected to come in at 4.4%, which would keep it near its highest level since 2021 and reinforce the narrative of gradual economic moderation.

In commodity markets, oil prices eased in early trading. U.S. benchmark crude slipped 37 cents to $56.45 a barrel, while Brent crude, the international standard, fell 35 cents to $60.21 a barrel, reflecting ongoing concerns about global demand amid slowing economic growth.