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Asian shares fall sharply after wobbly day on Wall Street

TOKYO (AP) — Asian stocks tumbled Wednesday after a shaky day ended with mixed results on Wall Street as markets jittered at the prospect of a possible recession.

Tokyo’s Nikkei 225 Index fell 2.1% to 26,020.56 while Seoul’s Kospi lost 2.8% to 2,161.95. In Sydney, the S&P/ASX 200 fell 0.8% to 6,442.40.

Hong Kong’s Hang Seng fell 2.8% to 17,363.08 and the Shanghai Composite Index fell 1.3% to 3,053.79. Taiwan’s benchmark fell 2.6%.

The week started with a sell-off that sent the Dow Jones Industrial Average into a bear market, joining other major US indices.

On Tuesday, the S&P 500 fell 0.2% to 3,647.29, its sixth straight loss. The Dow fell 0.4% to 29,134.99, while the Nasdaq Composite ended up 0.2%, closing at 10,829.50.

Small company stocks held up better than the broader market. The Russell 2000 added 0.4% to close at 1,662.51.

The main indices continue in a prolonged decline. With just a few days left in September, stocks are headed for another month of losses as markets fear higher interest rates used to fight inflation could push the economy into recession.

The S&P 500 was down about 8% in September and has been in a bear market since June, when it had fallen more than 20% below its all-time high set on January 4. The Dow’s decline on Monday put it in the same company as the benchmark and tech-heavy Nasdaq.

Central banks around the world have been raising interest rates in an effort to make borrowing more expensive and cool inflation to its highest level in decades. The Federal Reserve has been particularly aggressive, raising its benchmark rate, which affects many consumer and business loans, again last week. Now it is in a range of 3% to 3.25%. It was practically zero at the beginning of the year.

The Fed has also released a forecast suggesting its benchmark rate could be 4.4% by the end of the year, a full percentage point higher than forecast in June.

Wall Street is concerned that the Fed is putting too much brake on an economy that is already slowing and pushing it into a recession. Higher interest rates have been weighing on stocks, especially more expensive technology companies, which tend to look less attractive to investors as rates rise.

Investors will be watching the next round of corporate earnings closely to get a better idea of ​​how companies are dealing with inflation. Companies will start reporting their latest quarterly results in early October.

Consumer confidence remains strong, despite higher prices on everything from food to clothing. The latest consumer confidence report for September from The Conference Board showed that confidence was stronger than economists expected.

The government is to release its weekly report on jobless benefits on Thursday, along with an updated report on second-quarter gross domestic product. On Friday, the government will release another report on personal income and spending that will help provide more detail on where and how inflation is affecting consumer spending.

In other trading on Wednesday, benchmark US crude lost $1.28 to $77.23 a barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, used to set the international oil price, fell $1.27 to $83.60 a barrel in London.

The dollar fell to 144.73 Japanese yen from 144.81 yen. The euro was at 95.55 cents, down from 95.92 cents.

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