(Bloomberg) -- Asian equities dropped after technology stocks led Wall Street lower, with risk appetite sapped as data showed a softening in US manufacturing and its labor market.

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Shares in Australia and South Korea fell while benchmarks in Japan whipsawed and those in China opened lower. Futures for US equity benchmarks were largely flat. The tech-heavy Nasdaq 100 had declined on Thursday, with Tesla Inc. losing almost 10% after signaling it will keep cutting prices to stoke demand. The S&P 500 had fallen ahead of Friday’s options expiration.

The dollar was little changed after retreating against developed-market peers on Thursday, as traders pared back expectations for Federal Reserve rate hikes. The policy-sensitive two-year Treasury yield fell two basis points to 4.13% after declining 10 basis points on Thursday.

Fed Bank of Cleveland President Loretta Mester signaled support for another rate hike to quell inflation while flagging the need to watch recent bank stress that could crimp credit and dampen the economy. Her Dallas counterpart Lorie Logan said inflation has been “much too high,” while outlining measures to watch.

“If the Fed stays the course, broad financial conditions should continue to tighten, the economy should decelerate into recession, and stocks should trade down sharply,” wrote Chris Senyek of Wolfe Research. “On the flip side, the biggest upside risk to our bearish call remains the Fed backing off way too soon. Although, if the Fed fails to sustainably bring down inflation, the ultimate pain will likely be much worse 12-24 months down the road.”

Recurring unemployment benefit claims jumped to the highest level since November 2021, adding to signs that the labor market is beginning to lose momentum. Sales of previously-owned homes fell in March by more than forecast, underscoring a housing market that’s still on shaky footing despite some signs of stabilizing. US mortgage rates rose for the first time since early March.

The Treasuries action weighed on the New Zealand 10-year yield, which fell for a second day. The yen strengthened following data from Japan that showed a key measure of inflation outpacing forecasts ahead of a Bank of Japan meeting next week.

Shares in Rakuten Bank Ltd. jumped by a third in its debut in Tokyo in the biggest initial public offering in Japan since 2018. China-listed Contemporary Amperex Technology Co. Ltd. shares also rallied after the battery maker’s revenues surged in the first quarter.

Traders in China will be watching out for reaction to US President Joe Biden’s plans to sign an executive order in the coming weeks that will limit investment in key parts of China’s economy by American businesses.

In other markets, oil fell further after dropping by the most in more than a month on Thursday, wiping out almost all of the gains stemming from OPEC+’s surprise output cut on signs of a global economic slowdown. Gold was little changed around the $2,000 an ounce mark.

Key events this week:

• PMIs for Eurozone, Friday

• Japan CPI, Friday

• Fed’s Lisa Cook discusses economic research at an event, Friday

Some of the main moves in the market:

Stocks

• S&P 500 futures were little changed as of 10:30 a.m. Tokyo time. The S&P 500 fell 0.6%

• Nasdaq 100 futures rose 0.2%. The Nasdaq 100 fell 0.8%

• Japan’s Topix was little changed

• Australia’s S&P/ASX 200 fell 0.4%

• Hong Kong’s Hang Seng fell 0.4%

• The Shanghai Composite was little changed

• Euro Stoxx 50 futures rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was unchanged at $1.0970

• The Japanese yen was little changed at 134.12 per dollar

• The offshore yuan was little changed at 6.8821 per dollar

Cryptocurrencies

• Bitcoin rose 0.2% to $28,250.78

• Ether rose 0.5% to $1,946.74

Bonds

• The yield on 10-year Treasuries declined one basis point to 3.52%

• Australia’s 10-year yield declined three basis points to 3.46%

Commodities

• West Texas Intermediate crude fell 0.1% to $77.27 a barrel

• Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation.

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