Risk assets have plummeted with recession risk rising given the surge in yields and expectations of the Fed doing a Volcker.
The Shenzhen Component fell as the mainland Chinese stock market fell.
The Kospi in South Korea fell.
The S&P/ASX 200 is one of the worst performers in the region. The broadest index of Asia-Pacific shares was down.
The S&P 500 closed in bear market territory, down more than 20% from its January peak.
The major indexes in the US saw steep declines. The S&P 500 lost 3.07 points, or 0.11%, to close at 2,988.25. The tech-laden index fell by almost 5% to around 10,808.23.
The losses on Wall Street came as investors braced for a faster pace of interest rate hikes by the U.S. Federal Reserve.
The Fed is considering a 75-basis-point rate increase later this week. Many traders had expected a 50-basis-point hike. The Wall Street Journal was the first to report it.
Eric Robertsen, global head of research, said that if the Fed doesn't get inflation under control, they may have a 10 year inflation problem.
Robertsen said that the stock markets are beginning to reconcile with that prospect.
The director of economics at National Australia Bank said in a note on Tuesday that risk assets have plummeted due to the rise in recession risk.
In the early 1980s, former Fed Chief Paul Volcker helped tame inflation by raising the benchmark interest rate.
If the Fed hikes by 75bps that will be a true Volcker moment and underscore front loading, a 50bp hike in contrast would cement the likelihood of 50bp hikes at every meeting for the remainder of the year.
The yield on the benchmark 10-year Treasury note moved the most in over a year. The 2-year rate went up and is now at 3.4002%. Prices move with yields.
An inverted yield is when the 2-year rate is higher than the 10-year Treasury yield.
| TICKER | COMPANY | NAME | PRICE | CHANGE | %CHANGE |
|---|---|---|---|---|---|
| Nikkei 225 Index | *NIKKEI | 26455.9 | -531.54 | -1.97 | |
| Hang Seng Index | *HSI | 20787.52 | -280.06 | -1.33 | |
| S&P/ASX 200 | *ASX 200 | 6618.3 | -313.7 | -4.53 | |
| Shanghai | *SHANGHAI | 3227.21 | -28.34 | -0.87 | |
| KOSPI Index | *KOSPI | 2476.68 | -27.83 | -1.11 | |
| CNBC 100 ASIA IDX | *CNBC 100 | 8125.15 | -167.93 | -2.02 |
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 105.131, up from levels below 102.6 last week.
The Japanese currency was stronger against the dollar than it was yesterday. After falling from above $0.70, the Australian dollar was at $0.6959.
The price of oil was higher in the morning of Asia trading hours. The price of U.S. crude rose to $121.05 a barrel.
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