Asian shares are mostly declining, following a drop on Wall Street, as Federal Reserve Chair Jerome Powell said that stock prices were “fairly highly valued.”

A currency trader passes by a screen showing the Korea Composite Stock Price Index (KOSPI), top center left, and the foreign exchange rate between U.S. dollar and South Korean won, top center, at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Tuesday, Sept. 23, 2025. (AP Photo/Ahn Young-joon)

TOKYO (AP) — Asian shares mostly declined Wednesday following a drop on Wall Street, as Federal Reserve Chair Jerome Powell said that stock prices were “fairly highly valued.”

Japan's benchmark Nikkei 225 lost 0.4% in morning trading to 45,300.30. Australia's S&P/ASX 200 slipped 1.0% to 8,756.30. South Korea's Kospi dropped 1.1% to 3,448.44. Hong Kong's Hang Seng rose 0.6% to 26,305.02, while the Shanghai Composite gained 0.2% to 3,829.91.

U.S. stocks took a pause from their relentless rally, with the S&P 500 dipping 0.6%, the Dow Jones Industrial Average falling 88 points, or 0.2%, and the Nasdaq composite sinking 0.9%.

It’s the first pullback for the indexes after the trio set all-time highs in each of the last three days. Since surging from a bottom in April, the broad U.S. stock market has been facing criticism that it’s shot too high, too fast and become too expensive.

Powell said on Tuesday that the Fed is stuck in an unusual position because worries about the job market are rising at the same time that inflation has stubbornly remained above its 2% target. They were his first public remarks since the Fed cut its main interest rate last week for the first time this year. Analysts said his comments reiterated his stance that there is no risk-free path.

“Essentially the Fed Chairman confirmed what we already knew, which is that the central bank remains somewhat ‘between a rock and a hard place’ when it comes to managing the risks of rising inflation and falling employment,” said Tim Waterer, chief market analyst at KCM Trade.

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A currency trader stands near a screen showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Tuesday, Sept. 23, 2025. (AP Photo/Ahn Young-joon)

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

Traders Edward Curran, left, and Robert Charmak work on the floor of the New York Stock Exchange, Wednesday, Sept. 17, 2025. (AP Photo/Richard Drew)