Asian stocks were flat in early trade on Wednesday after Wall Street ended higher, with the S&P 500 index touching a record high on Tuesday, and as lower-level trade talks between the U.S. and China due this week boost hopes of easing trade tensions.
But concerns over the broader impact of the legal problems of two close associates of U.S. President Donald Trump pulled S&P futures lower, weighing on investor sentiment.
MSCI’s broadest index of Asia-Pacific shares outside Japan was flat, while Japan’s Nikkei stock index lost 0.2 per cent.
Australian shares fell 0.5 per cent after a leadership challenge to Australian Prime Minister Malcolm Turnbull on Tuesday.
“With leadership changes and disunity amongst the major parties having marked Australian politics for a decade now, the disruption is likely to be met negatively by business,” ANZ analysts said in a note.
On Tuesday, the S&P 500 rose as high as 2,873.23, topping the previous record of 2,872.87 set on Jan. 26, and is poised to become the longest-running bull market in the index’s history on Wednesday.
The Dow Jones Industrial Average closed up 0.25 per cent to 25,821.95, the S&P 500 rose 0.21 per cent to 2,862.91, and the Nasdaq Composite added 0.49 per cent to 7,859.17.
But S&P 500 E-mini futures were 0.5 per cent lower on Wednesday at 2847.75, after a guilty plea from Trump’s former personal lawyer, and the conviction of former Trump campaign chairman Paul Manafort.
“Next to these headlines, trade news fell completely under the radar,” Citi analysts said, noting “concern that something could come out linked to Trump or other of his associates” and that Cohen’s guilty plea sparked a late-session bid in U.S. treasuries.
The yield on benchmark 10-year Treasury notes fell to 2.8225 per cent compared with its U.S. close of 2.844 per cent on Tuesday.
The dollar weakened, as comments from Trump on Monday in an interview with Reuters continued to weigh.
Trump said he was “not thrilled” with the Fed under his appointee Chairman Jerome Powell for raising rates, and said the U.S. central bank should do more to boost the economy.
He also accused China and Europe of manipulating their currencies.
The dollar index, which tracks the greenback against a basket of six major rivals, was down 0.1 per cent at 95.184.
The dollar dropped 0.2 per cent against the yen to 110.11, edging closer to the key 110 level. The euro was up 0.05 per cent on the day at $1.1577.
In commodity markets, U.S. crude ticked up 0.3 per cent to $66.05 a barrel. Brent crude was 0.2 per cent higher at $72.76 per barrel.
Gold gained, with spot gold trading 0.1 per cent higher at $1196.95 per ounce.