TOKYO (AP) — Asian stocks were largely up on Thursday as Wall Street bounced back to its best day since June after bond market pressure eased somewhat.
The Japanese benchmark Nikkei 225 gained 0.9% in afternoon trading to 32,289.67. The Australian S&P/ASX 200 rose 0.5% to 7,182.10. The South Korean Kospi rose 1.2% to 2,534.60. The Bank of Korea’s Monetary Policy Board left the base rate unchanged at 3.50%.
The Hong Kong Hang Seng rose 2.1% to 18,220.68, while the Shanghai Composite rose 0.3% to 3,088.74.
A key event of the week for markets will be a speech later in the day by US Federal Reserve Chairman Jerome Powell. He is speaking at an event in Jackson Hole, Wyoming, which has historically been the setting for major policy announcements by the Fed.
The hope among investors is that the Fed has already raised rates for the last time in this cycle and will begin rate cuts early next year. But these hopes have waned with each stronger-than-expected report on the economy coming in lately.
“Equities in Asia appear to be on track, thanks to positive momentum in US markets,” said Stephen Innes, managing partner at SPI Asset Management.
On Wall Street, the S&P 500 climbed 1.1% to limit losses after what has been a dismal August so far. The Dow Jones Industrial Average rose 184 points, or 0.5%, and the Nasdaq composite rose 1.6%.
Big Tech stocks and others that benefit from easier interest rates led the way. They received some relief as 10-year Treasury yields fell further from their highest level since 2007 after a report suggested the US economy may be cooling.
A 2.2% increase for Apple shares and a 1.4% increase for Microsoft shares were two of the strongest forces pushing the S&P 500 higher.
Nvidia, also one of the most influential stocks in the market, rose 3.2% ahead of its highly anticipated earnings report. Expectations were huge for the report, which came out after trading ended for the day, and it still managed to beat forecasts.
Nvidia stunned Wall Street three months ago by predicting that a boom in artificial intelligence technology would mean the company would generate about $11 billion in revenue in the three months through July.
The announcement sparked a storm on Wall Street. Shares of AI-related companies soared, and investors tried to count how many times a CEO could mention “AI” in an earnings call. Nvidia’s shares have more than tripled so far this year, and it will have to meet much higher expectations to justify its big move.
Nvidia’s report appeared to cross the bar on Wednesday. Revenue for the last quarter ended up more than doubling to $13.51 billion from the previous year’s level. And the revenue forecast for the current quarter also beat Wall Street’s expectations. The stock rose in aftermarket trading.
Nvidia and just a handful of other companies accounted for the majority of the S&P 500’s gains earlier this year. Many of these “Magnificent Seven” stocks also benefited from the AI frenzy.
They’ve been under more pressure lately, as bond market yields are rising. When bonds pay more interest, investors have less need to pay high prices for stocks and other investments that can fluctuate sharply in price.
Treasury yields fell on Wednesday, taking some of that pressure off. Ten-year government bond yields fell from 4.33% at the end of Tuesday to 4.18%.
A preliminary analysis of US services and manufacturing fell to a six-month low, driving bond market yields lower. S&P Global Market Intelligence’s production measure still indicated growth, but less so as inflation and higher interest rates hurt activity.
“A near-stagnation in business activity in August casts doubt on the strength of US economic growth in the third quarter,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.
High interest rates are slowing down the whole economy and depressing investment prices, and have helped bring inflation down since peaking above 9% last summer. But the still solid labor market and US household spending threaten to make it difficult for inflation to cut the last percentage point to the Fed’s target of 2%.
All told, the S&P 500 gained 48.46 points to 4,436.01. The Dow Jones rose 184.15 to 34,472.98 and the Nasdaq climbed 215.16 to 13,721.03.
In energy trading, US crude fell 15 cents to $78.74 a barrel. Brent oil, the international standard, fell 10 cents to $83.11 a barrel.
In currency trading, the US dollar rose from 144.79 yen to 145.08 Japanese yen. The euro was priced at $1.0872 against $1.0865.
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AP Business writer Stan Choe contributed.
