HONG KONG: Most stocks fell on Tuesday after a sell-off on Wall Street fueled by renewed recession concerns following a report that Apple planned to cut spending amid uncertainty surrounding the economic outlook.

The drop in most Asian markets also came as oil prices surged on Monday caused by the fading of expectations that US President Joe Biden had convinced Saudi Arabia to pump more to ease a crisis of supply and moderate prices.

Losses among stocks eroded Monday’s gains, which came after a U.S. retail sales report that beat forecasts suggested consumers – the main driver of growth – remained resilient despite decade-high inflation and rising interest rates.

And analysts have warned that with the onset of earnings season, investors may find it harder to deal with falling corporate earnings or warnings about the outlook.

In a sign of concern among big business about an economic slowdown or recession, Bloomberg News said tech titan Apple was pulling back on hiring and some investments.

The news follows similar belt-tightening moves by other Silicon Valley giants, including Alphabet, Amazon and Facebook parent Meta.

“With Apple raising its hand and acknowledging that they are overstaffed, it’s a clear sign of caution from the mega-caps giants in a time of uncertainty,” said Stephen Innes of SPI Asset Management.

“Investors are hoping for a ‘kitchen’ quarter where companies flush out all the bad news at once. But I’m not sure [would] happen, and I think that makes it difficult to put an absolute floor on selling stocks,” he added.

The report led to a reversal on Wall Street, with all three major indexes ending in negative territory, having enjoyed most of the day on the upside.

In Asia, Hong Kong, Sydney, Seoul, Singapore, Taipei, Wellington and Bangkok all fell, although Tokyo rose as investors returned there from a long weekend to catch up with Monday’s regional rally. Mumbai, Manila and Jakarta also rose, while Shanghai rose slightly.

London, Paris and Frankfurt all fell in the morning.

Innes said markets are likely to face pressure for some time as central banks continue to raise borrowing costs to fight inflation, risking an economic slowdown.

“The likelihood of a recession dominates discussions in the United States, as inflation may have peaked in June when the Fed still has some massive hikes ahead before possibly pausing,” he said, referring to the Federal Reserve.

“We always hear that rate hikes are in the price, but they’re always a shocker when the market discounts reality, especially when they’re of the jumbo variety,” the analyst added.

The Fed’s rapid monetary policy tightening drove the dollar higher against most other currencies, reaching parity with the euro last week. However, the single currency strengthened this week ahead of a rate hike from the European Central Bank, with speculation growing that it would announce a half-point hike.

While some predict inflation may have peaked, oil prices – the main driver of the price spike – remain elevated despite recent losses.

Both major contracts rose slightly after climbing more than 5% on Monday on expectations that Riyadh would not open the taps further, with Biden’s plea appearing to have fallen on deaf ears.

Traders are also keeping a nervous eye on Europe, where a 10-day maintenance shutdown of the Nord Stream 1 pipeline from Russia is due to end.

Many fear that Russian President Vladimir Putin will keep it closed in retaliation for sanctions imposed on Moscow for its invasion of Ukraine. This would deal another blow to the already squeaky Eurozone economy and could push up crude prices.

Supply fears outweigh worries about demand hit in China by another possible lockdown in Shanghai as authorities struggle to contain another Covid-19 outbreak.