TOKYO – Asian markets mostly edged lower on Wednesday following a downturn in Wall Street, as Federal Reserve Chair Jerome Powell remarked that stock valuations were “fairly highly valued.”

Japan’s Nikkei 225 fell 0.4% in morning trade to 45,300.30. Australia’s S&P/ASX 200 dropped 1.0% to 8,756.30. South Korea’s Kospi was down 1.1% to 3,448.44. Conversely, Hong Kong’s Hang Seng increased 0.6% to 26,305.02, while the Shanghai Composite saw a slight rise of 0.2% to 3,829.91.

In the U.S., stocks temporarily halted their persistent rise as the S&P 500 decreased by 0.6%, the Dow Jones Industrial Average decreased by 88 points, or 0.2%, and the Nasdaq composite fell by 0.9%.

This marks the first decline in these indexes after reaching record highs for three consecutive days. Since its rise from a low in April, the general U.S. stock market has been criticized for possibly rising too quickly and becoming too costly.

On Tuesday, Powell noted that the Fed is in a unique position, facing concerns over rising unemployment alongside inflation persistently staying above its 2% objective. These were his initial public comments since the Fed reduced its primary interest rate last week for the first time this year. Analysts highlighted his statements as reinforcing his view that there is no risk-free solution.

“The Fed Chairman essentially confirmed what we already understood: the central bank is ‘between a rock and a hard place’ when it comes to balancing the risks of increasing inflation against declining employment,” stated Tim Waterer, chief market analyst at KCM Trade.

Fed officials have penciled in more cuts to rates through the end of this year and into next, but they are remaining wary because lower rates can also give inflation more fuel.

An update on Friday will show how much prices are rising for U.S. households based on the Fed’s preferred measure of inflation, and economists expect it to show a slight acceleration for last month.

On Wall Street, Nvidia weighed on the market after giving back some of its big gain from the day before, when it announced a partnership with OpenAI to build out data centers. Wall Street’s most influential stock lost 2.8%.

Other Big Tech stocks that have been some of the biggest reasons for Wall Street’s run to records gave back some of their big gains. Amazon fell 3%, and Microsoft slipped 1%.

All told, the S&P 500 fell 36.83 points to 6,656.92. The Dow Jones Industrial Average dropped 88.76 to 46,292.78, and the Nasdaq composite sank 215.50 to 22,573.47.

In the bond market, Treasury yields ticked lower. The yield on the 10-year Treasury eased to 4.11% from 4.15% late Monday.

In energy trading, benchmark U.S. crude added 14 cents to $63.55 a barrel. Brent crude, the international standard, gained 13 cents to $67.76 a barrel.

In currency trading, the U.S. dollar rose to 147.77 Japanese yen from 147.56 yen. The euro cost $1.1801, down from $1.1818.

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AP Business Writer Stan Choe contributed. Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama