U.S. stock futures fell, while Asian markets opened the week with mixed performance. On Monday, Tokyo's benchmark index dropped nearly 2% following weak factory activity data, while crude oil prices surged by over $1 per barrel.
The Nikkei 225 index declined 1.9% to close at 49,303.28 after Japan's corporate investment data fell short of expectations. Markets are closely monitoring manufacturing activity reports across Asia for signs of the impact of former U.S. President Donald Trump's tariffs on regional economies.
A survey of Japanese factory managers revealed slowing growth in November manufacturing activity. The S&P Global Japan Manufacturing Purchasing Managers' Index (PMI) edged up to 48.7 from October's 48.2 but remained in contraction territory (below the 50-point threshold) for the fifth consecutive month.
Annabel Fiddes, Associate Director at S&P Global Market Intelligence, noted, "The latest PMI data indicates Japan's manufacturing sector continues to struggle with weak demand, with firms reporting another sharp decline in overall new orders."
In contrast, Hong Kong's Hang Seng Index rose 0.4% to 25,973.07. Shares of Meituan, a major online food delivery platform, fell 2.8% after reporting a net loss last quarter despite revenue growth, citing intense competition-driven price cuts in the sector.
China's Shanghai Composite Index gained 0.7% to 3,914.01, while South Korea's KOSPI slipped 0.2% to 3,920.37. Australia's S&P/ASX 200 dropped 0.6% to 8,565.20, Taiwan's Weighted Index declined 1%, and India's Sensex edged down 0.1%.
Shivani Tandon, Asia Economist at Capital Economics, observed that while Asian exports have rebounded recently, November's PMI data still reflects sluggish factory activity across the region.
Despite U.S. economic uncertainties, markets anticipate stronger-than-expected consumer spending during the "Black Friday" and "Cyber Monday" retail season. Ahead of Monday's opening, S&P 500 futures fell 0.7%, and Dow Jones Industrial Average futures dropped 0.6%.
Last Friday, trading in the Dow, S&P 500, and Nasdaq was suspended for hours due to a technical glitch at CME Group, linked to an outage at CyrusOne's data center. In the shortened post-Thanksgiving session, the S&P 500 rose 0.5%, the Dow gained 0.6%, and the Nasdaq advanced 0.7%.
After mid-November declines driven by concerns about the sustainability of the AI boom, markets rebounded last week on expectations of further Fed rate cuts. Nvidia shares fell 1.8% on Friday, bringing its November loss to double digits, while Oracle dropped 23% and Palantir Technologies declined 16% for the month. However, some tech stocks posted monthly gains, notably Alphabet, which surged nearly 14% following excitement around its newly launched Gemini AI model.
The Fed has cut rates twice this year to support a slowing labor market. With rising inflation and cooling employment, policymakers face difficult decisions on further rate cuts that could stimulate the economy but risk fueling inflation. October's Fed meeting minutes revealed significant divisions among officials about next steps.
Investors are also watching retail stocks for signs of robust "Black Friday" participation. Macy's fell 0.3%, Kohl's rose 1.4%, Dick's Sporting Goods dropped 0.5%, while Abercrombie & Fitch gained 2.9% and American Eagle Outfitters climbed 0.7%.
In early Monday trading, U.S. benchmark crude rose $1.19 to $59.74 per barrel, and Brent crude increased $1.15 to $63.53. The dollar weakened to ¥155.39 from ¥156.14, while the euro strengthened to $1.16109 from $1.1596. Bitcoin fell 4.7% to $86,800.
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