Japan released data that showed its trade surplus jumped 49.6% in May from the previous year, but analysts said that was less than expected and highlights how the world's third largest economy and its exports may be only slowly recovering from the pandemic.
"Asian markets are quiet ahead of the Fed," said Robert Carnell, regional head of research Asia-Pacific at ING. "China's data dump may stir things up a bit today, but the main focus will be on the Fed's message and any hints they may give." The S&P 500 was down as much as 0.4% earlier in the day, after a report showed inflation on the wholesale level leaped last month by even more than economists expected. Prices for producers were 6.6% higher in May than a year earlier, the highest since 2010 and the latest evidence that inflation is bursting higher across the economy.
"From a prices standpoint, we're seeing inflationary pressure, and we believe the jury is still out on the timing and extent of when we see a leveling or whether this new new normal of higher prices is cemented," said Greg Bassuk, founder and CEO of AXS Investments. There are limited signs that inflation may be cooling in some parts of the economy. Lumber and copper prices have dropped from their highs of a few weeks ago. Copper sank another 4.3% Tuesday, and miner Freeport-McMoRan's stock fell 4.8%.