Stocks in Asia-Pacific and Europe traded mixed following a decline in Wall Street on Tuesday.
MSCI Asia-Pacific index fell slightly by 0.13 percent. Japan's Nikkei 225 closed sharply lower at 27,813.26, falling by 1.68 percent. The Hang Seng Index in Hong Kong ended 0.66 percent lower at 20,274.59. On the other hand, China's blue-chip CSI 300 finished 0.31 percent higher, while the South Korean Kospi rose by 0.59 percent.
In Australia, the benchmark S&P/ASX 200 index rose slightly by 0.017 percent to close at 7,237.20. New Zealand's S&P/NZX 50 declined by 0.27 percent to 11,866.83.
The pan-European STOXX 600 was volatile during the day, falling by 0.15 percent to 456.67. Germany's DAX index declined by 0.31 percent to 15,555.81. The CAC 40 in France also fell by 0.11 percent to 7,336.99. Meanwhile, in London, the FTSE 100 index rose by 0.42 percent to 7,666.25.
Previously, all three major indexes on the New York Stock Exchange finished lower. The Dow Jones Industrial Average finished at 33,402.38, losing 198.77 points or 0.59 percent. The S&P 500 closed at 4,100.6, shedding 23.91 points or 0.58 percent. The tech-focused Nasdaq ended the session at 12,126.33, losing 63.13 points or 0.52 percent.
The industrial sector became the biggest weight on the S&P 500 index, falling 2.3 percent. The material sector also finished lower.
This new development in equity markets followed a recent job report from the U.S. Labor Department, which showed that job openings in the U.S. last February fell to the lowest level in almost two years. Job openings in professional and business services fell by 278,000 from the previous month.
The February data brought down the ratio of vacancies to available workers to 1.7 to 1, lower than the previous 2 to 1 ratio. Analysts said the decline in job openings indicated that the influence of the Federal Reserve's monetary tightening in the economy had become more prominent.
"Cooling down of the labor market is one of the things necessary to combat inflation."
Andrzej Skiba, Head of the BlueBay U.S. Fixed Income Team at RBC Global Asset
The Fed has been raising interest rates since last year to tame inflation. RBC Global Asset Management head of the BlueBay U.S. fixed income team Andrzej Skiba said cooling down the job market was important to battle inflation since a robust job market could drive wage inflation. Before February, the U.S. job market remained stubborn, with 517,000 new jobs added in January.
In addition to the new job report, another data set showed that demand for U.S.-manufactured goods declined for a second consecutive month in February, signaling lower manufacturing activities.
Dollar declines on possible Fed's policy pivot
The U.S. dollar index fell to a two-month low of 101.45 on Tuesday as the market expected the Fed to pause hiking rates soon.
In its most recent rate policy meeting, the Fed raised its benchmark rate by a modest 25 basis points. Fed officials have also signaled that the central bank will pause interest rate hikes in the coming future, with last month's turmoil in the banking sector being a major contributing factor.
Analysts predict that the U.S. dollar will maintain its downward trend in the coming days due to the shift in the Fed's policy expectations and pressures from other major currencies.
"We believe the buck will slowly but surely continue to dwindle as the challenges of a recovering economy that wants to get away from dollar dominance will put downward pressure on its value," Juan Perez, director of trading at Monex USA, said.
The sterling hit a new 10-month high against the greenback on Tuesday, while the euro rose to its highest level since February.