Markets Waver Amid Inflation Uncertainty and Geopolitical Concerns

Asian shares declined and the dollar firmed as investors assessed challenges in slowing inflation while geopolitical tensions remained elevated. U.S. consumer spending rose, but inflation control stalled, potentially affecting future interest rate cuts. European and Asian markets showed mixed reactions amid economic and political uncertainties.

Asian shares fell Thursday alongside a slight increase in the dollar as investors digested U.S. economic data showing stalled progress in curbing inflation. Despite the resilient U.S. economy, geopolitical tensions contributed to a cautious sentiment, with thin trading expected during the Thanksgiving holiday.

MSCI's broadest index of Asia-Pacific shares outside Japan dipped by 0.4%, while Japan's Nikkei gained 0.48%. Investor sentiment was uneasy due to potential tariff conflicts under U.S. President-elect Donald Trump and reports of explosions in Ukrainian cities. Despite this, futures indicated European markets were set to open higher.

U.S. consumer spending slightly exceeded expectations in October, yet inflation control remains challenging. This development, alongside potential tariff hikes, might limit future interest rate cuts. Minutes from the Federal Open Market Committee revealed divided opinions on the necessity of more rate reductions, although another cut is still anticipated for December.

(With inputs from agencies.)