July 7, 2021: Asian markets were broadly down on Wednesday tracking steady oil prices as well as the end of a record streak on Wall Street, with concerns lingering over the economic recovery and China's crackdown on tech firms.
Oil prices had briefly spiked Tuesday before falling after the latest talks by OPEC+ crude producers fell apart, ending negotiations on a proposal to boost crude supply.
US oil futures had approached a seven-year peak after the talks were called off but investors quickly shifted course, selling both Brent and West Texas Intermediate futures contracts over concerns about the possible disintegration of efforts to rein in supply.
The trend in oil prices has also fanned fears about inflation, with investors worried that an overheating economy may force central banks such as the US Federal Reserve to hike interest rates earlier than thought.
“There are still concerns about what happens with the Fed tapering and there's lack of traction on the fiscal stimulus side,” Keith Lerner, chief market strategist at Truist Advisory Services, told Bloomberg News.
“Those uncertainties are just injecting some volatility and then you throw in concerns about peak economic growth. That just feeds into the concerns about — is the best growth behind us?”
Wall Street was down Tuesday, with the Dow and the S&P 500 retreating from records and Treasury yields dropping after the US Independence Day holiday after the release of a worse-than-expected economic indicator for the US service sector in June.
Those losses carried over to Tokyo on Wednesday, where the benchmark Nikkei 225 opened lower as a higher yen and dimming views of the US economy weighed on the market.
