Australia

Australian shares are set to open lower, after the S&P 500 and Nasdaq lost more ground.

ASX futures were down 0.7% or 55 points as of 7:30am on Friday, suggesting a lower open.

US bond yields rose and stocks mostly slumped Thursday as investors continued to adjust to the idea that interest rates may not come down this year.

The S&P 500 lost 0.2%, its fifth straight daily decline. The Nasdaq Composite dropped 0.5%. Both have shed nearly 5% so far in April. The Dow Jones Industrial Average gained less than 0.1%, or 22 points.

In commodity markets, Brent crude oil was down 0.4% to US$86.97 a barrel, while gold was up 0.8% at US$2,379.04.

In local bond markets, the yield on Australian 2 Year government bonds was down at 3.91% while the 10 Year yield was also down at 4.28%. US Treasury notes were up, with the 2 Year yield at 4.99% and the 10 Year yield at 4.63%.

The Australian dollar was 64.22 US cents down from its previous close of 64.31. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was up at 100.50.

Asia

Chinese shares ended broadly lower, weighed by energy and semiconductor shares. Energy stocks declined after oil prices fell to a three-week low on Wednesday following the recent rally on the Middle East tension. PetroChina dropped 2.8% and Cnooc was 2.0% lower. Semiconductor shares ended broadly lower despite the world's largest contract chip maker TSMC reporting better-than-expected 1Q results. Hygon Information Technology dropped 0.9% and NAURA Technology Group shed 1.8%. Insurance and bank stocks lifted the market, with China Life Insurance up 3.3% and Industrial & Commercial Bank of China rising 0.4%. The benchmark Shanghai Composite Index ended 0.1% higher at 3074.22, the Shenzhen Composite Index edged 0.1% lower; the ChiNext Price Index declined 0.55%.

Hong Kong's Hang Seng Index closed 0.8% higher at 16385.87, tracking U.S. futures higher. Markets may be watching for U.S. weekly jobless claims due later, as well as IMF comments on the global economy later today. Among advancers, Ping An Insurance gained 4.15%, China Merchants Bank rose 2.8% and China Life Insurance was 2.6% higher. Energy stocks fell as oil prices edged lower, with Cnooc down 2.2%, PetroChina 1.5% lower and China Resources Power shedding 0.8%.

Japanese stocks ended lower, dragged by falls in tech and real-estate stocks, as uncertainty continues over tensions in the Middle East and over the Fed's policy outlook. Tokyo Electron was down 2.8%, SoftBank Group was off 3.2%, Mitsubishi Estate was down 2.7% and Mitsui Fudosan was 3.0% lower. Inpex was 3.8% lower following drops in crude oil prices overnight. Investors are focusing on any response by Israel to Iran's weekend assault, as well as any warnings from Japanese officials against the yen's recent weakening. The Nikkei Stock Average was down 0.8% at 37660.48.

Indian shares closed lower, dragged by bank and auto stocks. Investors are watching out for corporate earnings and more signals from the U.S. Fed on rate cuts. Axis Bank and Tata Motors were down 2.7% and 2.1%, respectively. ICICI Bank lost 1.1%. Among the few gainers, Bharti Airtel rose 4.15% and Power Grid Corp. of India was up 2.1%. Angel One was 2.1% lower even though 4Q net profit climbed 27%. ICICI Lombard General Insurance was up 3.7% after 4Q net profit gained 19%. HDFC Life Insurance advanced 0.2% after 4Q net profit rose 14%. The benchmark Sensex closed 0.6% lower at 72488.99.

Europe

European shares closed higher on Thursday, with the pan-European Stoxx Europe 600 up 0.24% to 499.70, the CAC 40 gaining 0.52% to 8,023.26 and Germany's DAX adding 0.38% to 17,837.40.

The FTSE 100 closed up 0.75% to finish at 7,877.05.

North America

Bond yields rose and stocks mostly slumped Thursday as investors continued to adjust to the idea that interest rates may not come down this year.

The S&P 500 lost 0.2%, its fifth straight daily decline. The Nasdaq Composite dropped 0.5%. Both have shed nearly 5% so far in April. The Dow Jones Industrial Average gained less than 0.1%, or 22 points. The blue-chip index's 5.1% fall this month has wiped out nearly all of its 2024 advance.

The yield on benchmark 10-year Treasury notes rose to 4.646%, from 4.584% on Wednesday.

Stocks started the day higher following a flurry of corporate earnings reports and economic data that showed continued strength in the labor market and rising business activity. Major stock indexes retreated in afternoon trading.

Stocks have sold off since last week when inflation data came in hotter than expected. The consumer price data suggested that the rate of inflation isn't as close to the Federal Reserve's targeted 2% as many investors believed it would be when they began in autumn to bid up stocks in anticipation of interest-rate cuts this year.

The prospect of higher rates for longer has boosted the opportunity cost of owning risky assets, such as technology stocks, and dimmed the prospects of shares for rate-sensitive sectors such as real-estate companies, which have become this year's laggards.

The S&P 500 remains roughly 20% higher than it was in late October when benchmark Treasury yields peaked just above 5%. The question now is how much stocks should come down if their rise was based on lower rates this year.

"One could rationally argue that we still have quite a bit to go if the main cause of that rally was indeed the premise that the Fed is going to be cutting rates dramatically," said Peter Cramer, a senior portfolio manager at SLC Management. "In our view, we're not going to see any rate cuts this year."

Economic data Thursday suggested that high borrowing costs have yet to take a significant toll on the economy.

The Federal Reserve Bank of Philadelphia's gauge of regional manufacturing conditions showed a big jump in activity, rising to 15.5 in April, from 3.2 in March. The highest result since April 2022, when interest rates were first lifting off, surprised economists, who had forecast a modest decline.

Meanwhile, federal employment data showed continuing strength in the labor market with jobless claims last week unchanged from a revised tally of the week prior.

"I don't understand how cutting rates can get you to that 2% target unless you have some kind of material economic slowdown. I'm not really seeing that," said David Miller, chief investment officer at Catalyst Funds.

Quarterly results drove big moves in individual stocks Thursday. Genuine Parts paced the S&P 500, rising 11% after the NAPA Auto Parts owner reported quarterly earnings that beat analysts' expectations and boosted its 2024 profit outlook.

Alaska Air shares rose after the company reported a smaller loss than analysts had feared following the midair blowout of a door plug and subsequent grounding of the Boeing 737 MAX 9.

Credit reporting firm Equifax and toolmaker Snap-On were among the S&P 500's biggest losers, dropping 8.5% and 7.7%, respectively, after quarterly results disappointed investors.

In commodities, cocoa prices continued to soar. Chocolate's key ingredient had its biggest ever daily price jump in the futures market, rising $969 a metric ton Thursday to close at a new record of $11,035. Cocoa futures cost nearly quadruple what they did a year ago due to poor growing weather in West Africa and speculators that have piled into one of the year's hottest trades.

Copper futures rose 2.3% to $4.4405 a pound, the highest price in nearly two years.