Stock market today: Asian shares mostly rise despite worries about US debt talks

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A currency is displayed near screens that show the Korea Composite Stock Price Index, center, and the exchange rate between U.S. Dollar and South Korean won in a foreign exchange room in Seoul (South Korea), Monday, May 22,2023. Investors worried about whether the United States would be able reach an agreement to avoid a default on federal debt pushed Asian shares higher Monday.

Lee Jin-man/AP

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A currency trader stands in front of screens that show the Korea Composite Stock Price Index, left, and the foreign rate between U.S. Dollar and South Korean won, at a foreign exchange room in Seoul South Korea on Monday, May 22,2023. Investors worried about whether the United States would be able reach an agreement to avoid a default on federal debt pushed Asian shares higher Monday.

Lee Jin-man/AP

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A currency trader stands in front of a screen that shows the current foreign exchange rate for the U.S. Dollar and South Korean Won at a foreign exchange room in Seoul, South Korea on Monday, May 22,2023. Investors worried about whether the United States would be able reach an agreement to avoid a default on federal debt pushed Asian shares higher Monday.

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A currency trader sits near screens that show the foreign exchange rate at a foreign trading room in Seoul, South Korea on Monday, May 22,2023. Investors worried about whether the United States would be able reach an agreement to avoid a default by the federal government pushed Asian shares higher on Monday.

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Currency traders monitor computer screens near the screen displaying the Korea Composite Stock Price Index KOSPI at a foreign currency dealing room in Seoul (South Korea), Monday, May 22,2023. Investors worried about whether the United States would be able reach an agreement to avoid a default on federal debt pushed Asian shares higher.

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TOKYO, Japan (AP) - Asian shares were mostly higher on Monday as investors worried about whether the United States would be able reach a deal in order to avoid a default.

Nikkei's benchmark index, the Nikkei225, was barely changed in early trading. It gained nearly 0.1% and closed at 30,833.94. S&P/ASX200 in Australia fell 0.3% to 7,261.40. South Korea's Kospi rose 0.9% to 2,560.16. Hong Kong's Hang Seng rose 1.2% to 19,691.82, and the Shanghai Composite gained 0.1% to 3,287.30.

The markets are watching closely a crucial meeting between House Speaker Kevin McCarthy and President Joe Biden, scheduled for later that day at the White House. This will be about the debt ceiling. A default on U.S. debt will almost certainly cause a recession, and this would have a negative impact on global economies.

Stephen Innes said that it is unlikely that the U.S. will default on its debt before June. However, the timing of this deal can't be predicted.

While negotiation strategy and incentives suggest a last-minute agreement, we'll soon know if it is baked beans or lobster over the Memorial Day holiday.

The data for Japan's machinery orders for March, which were released on Monday, showed a slowdown for the third largest economy in the world. The key indicator fell 3.9%, the second consecutive month of declines. Analysts believe that a recovery will occur during the current quarter as the domestic manufacturing slowly recovers from the negative effects of the pandemic.

Wall Street ended the week with a lower closing price. The S&P500 fell 6.07 points or 0.1% to 4,191.98. The Dow Jones Industrial Average dropped 109.28 points, or 0.3% to 33,426.63, and the Nasdaq Composite lost 30.94 points, or 0.2% to 12,657.90.

Over the weekend, White House officials and House Republicans concluded another round of discussions.

Washington must reach a compromise on the budget and raise the borrowing limit of the country to avoid a default. Democrats and Republicans are facing a deadline of June 1, when the U.S. Government could run out cash to pay their bills unless Congress allows them to borrow more.

Jerome Powell, the U.S. Federal Reserve chair, made comments on Friday that indicated the Fed might leave interest rates alone when it meets again in June.

Treasury yields lost some of the gains they had made earlier in the session as traders reduced their bets on another Fed rate increase in June.

The yield for the 10-year Treasury increased to 3.69%, from 3.65% at late Thursday. This yield is used to set mortgage rates and other important loans.

Before Powell started speaking, the yield on two-year Treasury bonds, which is more sensitive to expectations of Fed action, reached a high of 4.33%. Later, it fell to 4.25% from 4.26% on Thursday.

Analysts had expected that the majority of S&P 500 companies would report higher earnings at the beginning of the year. They're still on course to report a second quarter of declining profits from the year-ago level.

Energy trading saw benchmark U.S. Crude drop 55 cents, to $71.00 per barrel. Brent crude, which is the international standard for oil, dropped 58 cents, to $75.00 per barrel.

The U.S. Dollar dropped to 137.65 Japanese Yuen, down from 137.88 Japanese Yen. The euro now costs $1.0823 compared to $1.0808.

Stan Choe, AP Business Writer from New York, contributed to this article.

Yuri Kageyama on Twitter

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