Asian equities fluctuated despite Wall Street rally

Airlines helped lead the way after Delta Air Lines said it still sees pent-up demand in the pipeline as passengers make up for missed travel opportunities during the pandemic. It particularly highlighted high-income customers, who account for three-quarters of air travel spending and still appear to be in good financial shape despite high inflation.

Delta’s stock was up 6.8%, American Airlines was up 5.5% and United Airlines was up 5.1%.

Major tech stocks were also strong and continued a big run this year, spurred by excitement surrounding artificial intelligence technology. Nvidia, which has been at the center of the AI ​​frenzy, rose 3.1% to boost year-to-date gains to 186.5%.

However, high inflation affects other companies more directly. Walgreens Boots Alliance was down 9.3% after reporting weaker earnings than analysts had expected for its last quarter.

Reports on the US economy were largely stronger than expected on Tuesday. A consumer confidence reading rose to its highest level since early 2022, and orders for durable manufactured goods rose unexpectedly, beating economists’ forecasts for a pullback.

New home sales in May also beat economists’ expectations, driving homebuilders up. Lennar was up 4.1% and Toll Brothers was up 3.3%.

Such data will feed into decisions by the Federal Reserve and other central banks on whether or not to raise interest rates. High rates can suppress inflation, but they can also slow down the entire economy, increasing the risk of a recession.

Christine Lagarde, the head of the European Central Bank, warned on Tuesday that inflation is slowly declining and pledged to raise interest rates high enough to break this persistence. She again made it seem almost certain that the central bank will raise interest rates again in July.

That is also the expectation for the Federal Reserve. But the hope on Wall Street is that a hike next month could be the last for the Fed, even though it recently suggested it could raise rates two more times this year.

In the bond market, the yield on the 10-year US Treasury rose to 3.76% from 3.72% late Monday. It helps set rates for mortgages and other important loans.

Two-year Treasury yields, which move more than expected for the Fed, rose from 4.74% to 4.76%.

In energy trading, benchmark US crude added 11 cents to $67.81 a barrel in electronic trading on the New York Mercantile Exchange. Brent oil, the international standard, rose 10 cents to $72.36 a barrel.

In currency trading, the US dollar fell from 144.02 yen to 143.91 Japanese yen. But the dollar’s recent appreciation against the yen has sparked speculation about how this could affect policymakers, and what it could mean for the economy at a time when inflationary pressures have increased after years of deflation. The euro was priced at $1.0948, down from $1.0959.

AP Business Writer Stan Choe contributed.

Yuri Kageyama is on Twitter https://twitter.com/yurikageyama