Asian shares mostly fall and US futures are little changed after US inflation data improves

Asian markets experienced a general decline on Friday following better-than-expected U.S. inflation data for July. The Nikkei 225 index in Tokyo rose by 0.3% to 68,533.85, while the Kospi in South Korea increased by 1.3% to 6,924.74. Hong Kong's Hang Seng fell by 1% to 25,137.87, and the Shanghai Composite index dropped by 0.5% to 3,908.05.

Australia's S&P/ASX 200 fell by 1.1% to 9,090.90, and Taiwan's Taiex decreased by 0.2%. India's Sensex also declined by 0.5%. Earlier in the week, the S&P 500 had reached a record high close of 7,798.99, with the Dow Jones Industrial Average up by 0.1% to 53,839.99 and the Nasdaq composite gaining 0.8% to 26,803.03. Despite the overall market drop, U.S. futures remained relatively unchanged.

July's wholesale inflation rate, which was 4.7% higher than a year ago, was less severe compared to the 5.5% rate in June and slightly better than economists' expectations. If inflation continues to decrease, the Federal Reserve might postpone further interest rate hikes. Lower interest rates can hinder economic growth and make borrowing more expensive, while higher rates could help control inflation.

Stephen Innes of SPI Asset Management commented that the "disinflation ducks are starting to line up, and with oil also backing off, the market has steadily stripped away the case for another near-term Fed hike." This potential rate decision could be the first in over three years and might upset President Donald Trump, who had been advocating for lower interest rates.