Stock market today: Asian shares track Wall Street's retreat

Shares retreated Thursday in Asia after U.S. stocks fell under the weight of higher yields in the bond market, with the Dow Jones Industrial Average giving up more than 400 points.

Tokyo’s Nikkei 225 benchmark shed 1.5% to 37,980.55 and the Hang Seng in Hong Kong declined 0.6% to 18,362.23.

The Shanghai Composite index edged less than 0.1% higher to 3,113.06.

Australia's S&P/ASX 200 slipped 0.4% to 7,632.10, while the Kospi in Seoul sank 0.9% to 2,652.98.

Taiwan's Taiex lost 0.8%.

“Hotter and stickier than expected global inflation appears to be taking the air out of asset markets,” Mizuho Bank said in a commentary. “In other words, “Goldilocks” coming undone. And worries about adverse demand impact from higher rates seeping through,” it said.

On Wednesday, the S&P 500 dipped 0.7%, to 5,266.95, trimming its gain for May, which had been on track to be its best month since November. Four out of every five stocks in the index dropped.

The Dow industrials lost 1.1% to 38,441.54 and the Nasdaq composite slipped 0.6% to 16,920.58 after setting its latest all-time high.

American Airlines Group led a slump for airline stocks after cutting its forecast for profit and other financial targets for the spring. The carrier said fuel costs may be a bit lower than previously thought, but an important revenue trend would likely be as well. Shares fell 13.5%.

ConocoPhillips fell 3.1% after it said it would buy Marathon Oil in an all-stock deal valuing the company at $22.5 billion, including $5.4 billion of net debt. It’s the latest big deal for an industry that’s seen several buyout announcements recently. Marathon Oil rose 8.4%.

Advance Auto Parts sank 11% after its results and revenue for the latest quarter came up just shy of analysts’ expectations.

Another climb in longer-term Treasury yields also weighed on the stock market, and the 10-year yield rose to 4.61% from 4.54% late Tuesday following an auction of $44 billion in seven-year Treasurys.

The 10-year yield is still down for the month, but it’s been creeping higher since dropping below 4.40% in the middle of May. Higher Treasury yields hurt prices for all kinds of investments.

This month’s swings in yields have also come as traders recalibrate their expectations for when the Federal Reserve could begin cutting its main interest rate, which is at its highest level in more than two decades.

With inflation stubbornly higher, traders have had to delay their too-optimistic forecasts for rate cuts several times this year.

The Fed is trying to pull off the balancing act of grinding down on the economy just enough through high interest rates to get inflation fully under control, but not so much that it leads to widespread layoffs.