Shares in the Asia-Pacific traded lower on Monday following Fed Chairman Jerome Powell's speech at Jackson Hole on Friday. He warned that rising interest rates will cause "some pain" to the U.S. economy, saying higher interest rates likely will persist "for some time."
In Australia, the S&P/ASX 200 fell 1.95% to end the session at 6,965.50.
Hong Kong's Hang Seng index was 0.76% lower in the final hour of trade and the Hang Seng Tech index dropped 1.36%.
MSCI's broadest index of Asia-Pacific shares outside Japan dropped 1.9%, while the Japanese yen traded at 138.68 per dollar.
On Friday in the U.S., the Dow Jones Industrial Average plunged 1,008 points, or 3.03% to 32,283.40. The S&P 500 fell 3.37% to 4,057.66 and the Nasdaq Composite dropped 3.94% to 12,141.71.
"While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses," Powell said. "These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain."
He said the Fed's decision in September "will depend on the totality of the incoming data and the evolving outlook."
Singapore considers tougher crypto measures, says retail investors 'irrationally oblivious' to risks
Singapore is weighing new measures that would make it more difficult for retail investors to trade cryptocurrency, the country's central bank chief said.
"Many consumers are still enticed by the prospect of sharp price increases in cryptocurrencies," Ravi Menon, managing director of the Monetary Authority of Singapore said. "They seem to be irrationally oblivious about the risks of cryptocurrency trading."
Menon said one area the MAS is considering is "adding frictions" to is retail access.
"These may include customer suitability tests and restricting the use of leverage and credit facilities for cryptocurrency trading," he said.
Fed Fund Futures inch higher for likelihood of 75bps hike in September: FedWatch
The probability of a 75-basis-point hike at September's FOMC meeting rose to 70.5% as of early Monday morning U.S. time, according to the CME Group's FedWatch measure.
Traders' expectations have been split between a half-point and three-quarter point increase. The probability for the 0.75 point move stood at 54.5% on Friday morning in the U.S. shortly after Fed Chairman Jerome Powell's speech in Jackson Hole.
The chance for a 50-basis-point hike now stands at 29.5%, FedWatch showed.
Wall Street's Friday sell-off shows equity markets yet to price in a recession, ING says
The negative reaction in the stock market following Fed Chairman Jerome Powell's speech shows that higher rates haven't been reflected in equity prices, according to Rob Carnell, head of research at ING.
On Friday, Powell reiterated that the central bank will continue raising rates to subdue inflationary pressures, warning there may be "some pain" ahead as these measures take hold.
"Powell's saying you need a recession to get this under control, to get inflation down, and I think that's really where the equity market has to start thinking what's the right price for the U.S. in a recession with high rates thrown in," Carnell said on CNBC's Capital Connection.
"Realistically, that means some sort of recession," he said. "The only big question is how bad, how long is it going to be?"
Goldman Sachs expects China's factory activity to contract in August
Goldman Sachs expects China's official manufacturing Purchasing Managers' Index (PMI) in August to decline to 48.8 from 49.0 in July, analysts said in a note on Monday.
The note also mentioned it expects the Caixin manufacturing PMI to decline to 49.8 in August from 50.4 in July, citing recent measures taken by regional governments to suspend industrial production to ensure electricity supply.
"Tighter Covid related restrictions in August vs July, and hot weather might have also negatively affected construction activity," the analysts wrote.
Goldman's predictions are more pessimistic than the average forecast in Reuters polls. Analysts predict that the official manufacturing PMI will come in at 49.2 and the Caixin manufacturing PMI will have a reading of 50.2, according to Eikon data.
Meituan bucks trend of lower markets after beating estimates
Meituan shares bucked the regional trend despite China and Hong Kong markets opening lower.
The Chinese food delivery company was trading 4.62% higher while the Hang Seng Tech Index was down 0.8%.
The company on Friday beat estimates with a 16.4% rise in quarterly revenue from a year earlier, despite that being its slowest quarterly growth in two years, according to Reuters.
Over the weekend, China also reported its industrial profits were dragged down 1.1% in the January to July period compared with a year ago. Reuters reported that the fall in profits came as fresh Covid measures and power shortages due to heatwaves threatened production in the country.
Australia's retail sales rise more than expected in July
Retail sales in Australia rose 1.3% in July compared to June, according to the latest data released by the Australian Bureau of Statistics.
That was much higher than the 0.3% predicted by analysts in a Reuters poll and the 0.2% print for June.
The latest data marked the seventh consecutive month of growth this year.
The July figure was 16.5% higher compared with the same period a year ago.
— Abigail Ng
Warren Buffett loves this stock. But Morningstar is more bearish and expects it to trade 40% lower
Warren Buffett may be a big fan of this favorite retail stock, but Morningstar has a more bearish view on it.
The stock has had a meteoric rise this year, but here's why Morningstar's analyst David Meats isn't positive on it.
— Zavier Ong
U.S. Treasury yields climb to decade highs
The yield on the U.S. 2-year Treasury note briefly climbed to 3.45% Monday morning, the highest since Nov. 2007, as Asia-Pacific markets drop after Powell's speech on Friday.
The 10-year yield rose to 3.09% while the 30-year yield also climbed to 3.2%. The yield on the 5-year Treasury note was higher as well at 3.2%.
Yields move inversely to prices, and a basis point is equal to 0.01%.
— Jihye Lee
CNBC Pro: Goldman says the world is at an 'inflection point' and it's time for new investing playbooks
The world is at an "inflection point" — and that means there will be "profound changes" to the way we invest, Goldman Sachs Asset Management said in a recent report.
The firm pointed to rising interest rates as a result of persistent inflation, disrupted supply chains, "elevated sensitivity" to climate issues, geopolitical instability and deglobalization.
"In this new environment, the portfolio construction playbook that worked so well in recent decades may be less effective going forward, forcing a rethink in approach," they added.
Here's how investors can respond, according to Goldman.
— Weizhen Tan
Japanese yen continues to weaken following Powell's speech
The Japanese yen continued to weaken sharply against the greenback following Fed Chair Jerome Powell's hawkish comments on Friday.
Japan's yen has been weakening against the dollar as monetary policy in the two countries diverge, with the U.S. currency boosted by higher rates.
"USD/JPY will take its cue from the USD and US Treasury yields in our view," analysts at the Commonwealth Bank of Australia wrote in a note.
The yen last changed hands at 138.37 per dollar.
— Abigail Ng
Futures open lower
The negative momentum from Friday appears to have lasted over the weekend, as U.S. stock futures opened lower on Sunday evening.
Dow futures fell more than 200 points, while Nasdaq 100 futures fell about 1%.
— Jesse Pound