European stocks dropped in early trading and Asian markets were mostly lower on Wednesday after U.S. stocks hit new record highs, Associated Press reported.

The future for the Dow Jones Industrial Average and that for the S&P 500 both edged 0.1 percent lower.

Britain’s FTSE 100 fell 0.5 percent to 8,377.95 after the Office for National Statistics announced a stronger-than-expected inflation reading that dashed hopes for a rate cut in June. Inflation fell to 2.3 percent in April, down from 3.2 percent in March. But it remained above the Bank of England’s 2 percent target.

France’s CAC 40 lost 0.4 percent in early trading to 8,107.40, while Germany’s DAX declined 0.2 percent to 18,686.15.

In Asia, Tokyo’s Nikkei 225 fell 0.9 percent to 38,617.10 after Japan reported that its trade deficit rose last month as rising costs for imports outpaced an 8 percent rise in exports from the year before. The data were weaker than analysts had forecast.

Hong Kong’s Hang Seng index lost 0.2 percent to 19,184.85, while the Shanghai Composite index was nearly unchanged at 3,158.54.

In South Korea, the Kospi was virtually unchanged at 2,723.46. Australia’s S&P/ASX 200 edged 0.1 percent lower to 7,848.10.

Taiwan’s Taiex gained 1.5 percent as shares in market heavyweight Taiwan Semiconductor Manufacturing Corp. jumped 2.7 percent.

Markets in Thailand were closed for a holiday.

On Tuesday, the S&P 500 rose 0.3 percent to 5,321.41 and surpassed its record set last week. The Nasdaq composite gained 0.2 percent to 16,832.62, a day after setting its latest all-time high. The Dow Jones Industrial Average climbed 0.2 percent to 39,872.99 and is sitting just below its high set last week.

Indexes have risen to records recently largely on expectations the Federal Reserve will cut interest rates later this year as inflation cools. More reports showing big U.S. companies earning fatter profits than expected have also boosted the market.

Rates for mortgages, credit cards and other payments have become more expensive because the Federal Reserve has been keeping its main interest rate at the highest level in more than two decades. It is trying to pull off a tightrope walk where it grinds down on the economy just enough through high interest rates to snuff out high inflation but not so much that it causes a painful recession.

This week does not have many top-tier economic reports, and the biggest potential for sharp moves in the market will likely come from profit reports.

The week’s headliner is Nvidia, whose stock has rocketed higher amid a frenzy around artificial-intelligence technology. It will report its latest quarterly results on Wednesday, and expectations are high.

Target also reports later in the day with Ross Stores following Thursday. They could offer more details on how well spending by U.S. households is holding up. Pressure has been rising on them amid still-high inflation, and it seems to be the highest on the lowest-income customers.

Benchmark U.S. crude fell US$1.04 to US$77.62 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, declined US$1.25 to US$81.63 a barrel.

The U.S. dollar rose to 156.42 Japanese yen from 156.16 yen. The euro cost US$1.0857, up from US$1.0854.