WORLD

Stock market today: Asia follows Wall St up on hopes Fed will ease off rate hikes

Jun 1, 2023, 12:10 AM | Updated: 9:08 pm

Currency traders watch monitors at the foreign exchange dealing room of the KEB Hana Bank headquart...

Currency traders watch monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Thursday, June 1, 2023. Asian benchmarks were mostly higher Thursday after the U.S. House of Representatives approved a debt ceiling and budget cuts package, avoiding a default crisis. (AP Photo/Ahn Young-joon)
Credit: ASSOCIATED PRESS

(AP Photo/Ahn Young-joon)

BEIJING (AP) — Asian stock markets followed Wall Street higher Friday ahead of an update on the U.S. jobs market after Federal Reserve officials reignited hopes another interest rate hike might be postponed and lawmakers gave final approval to a deal to avert a government debt default.

Shanghai, Tokyo, Hong Kong and Seoul advanced. Oil prices strengthened.

Wall Street’s benchmark S&P 500 index rallied 1% on Thursday after data showed manufacturing and retail activity weakening. That added to hopes the Fed might decide upward pressure on prices is easing and more rate hikes can be postponed or scaled down.

“Skipping a rate hike” at this month’s Fed meeting would let policymakers “see more data before making decisions,” said a board member, Philip Jefferson. The president of the Federal Reserve Bank of Philadelphia, Patrick Harker, made similar comments.

The statements “reignited the prospect of skipping a hike” after strong jobs data last week fed fears of more increases, said James Knightley of ING in a report.

However, Knightley said, if a monthly U.S. government report due out Friday shows the job market still is strong, that “could easily swing things back in favor of a hike.”

Late Thursday, the Senate gave final approval to an agreement to raise the amount the government can borrow in exchange for spending cuts.

The widely expected step removed the threat of default that roiled market last week before President Joe Biden and Speaker Kevin McCarthy of the House of Representatives negotiated a compromise.

The Shanghai Composite Index gained 0.7% to 3,226.58 and the Nikkei 225 in Tokyo added 0.8% to 31,384.93. The Hang Seng in Hong Kong surged 3.4% to 18,833.15.

The Kospi in Seoul rose 0.9% to 2,591.48 and the S&P ASX 200 in Sydney was 0.3% higher at 7,130.20.

New Zealand declined while Bangkok advanced. Markets in Singapore and Indonesia were closed for holidays.

On Wall Street, the S&P 500 rose to 4,221.02. The Dow Jones Industrial Average gained 0.5% to 33,061.57 and the Nasdaq composite jumped 1.3% to 13,100.98.

While the agreement on avoiding a U.S. debt default was positive for the market, investors are more concerned about whether the economy will fall into a recession before inflation recedes enough to convince the Fed to ease of rate hikes.

A report Thursday showed fewer workers applied for unemployment benefits last week than expected, while another suggested employers increased their payrolls last month by more than forecast.

That’s good news for workers and the overall economy, but the Fed worries a strong job market could also keep pressure up on inflation.

A report from the Institute for Supply Management said manufacturing shrank for a seventh month in May. The contraction was worse than both the prior month and what economists expected.

Following those reports, traders were largely betting on the Fed to hold rates steady, though Jefferson also said that wouldn’t necessarily mean the end to hikes.

Apple, Microsoft and Amazon all rose at least 1.3%. Their movements carry extra weight on the S&P 500 because they are some of the most valuable on Wall Street.

Dollar General dropped 19.5% after the retailer reported weaker profit and revenue for the latest quarter than analysts expected. It serves lower income households.

Macy’s, which also owns Bloomingdale’s stores, rose 1.2% after reporting better-than-expected profit but weaker revenue than forecast. It also slashed expectations for the year and said shoppers began to pull back starting in March.

Some of the enthusiasm surrounding Wall Street’s recent frenzy around artificial intelligence also cooled.

C3.ai gave a forecast for revenue this upcoming fiscal year that failed to wow Wall Street like Nvidia’s did last week. C3.ai tumbled 13.2%, though it’s still up 210% so far this year. Nvidia rose 5.1%.

In the energy market, benchmark U.S. crude rose 38 cents to $70.48 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.01 on Thursday to $70.10. Brent crude, the price basis for international oil trading, advanced 42 cents to $74.70 per barrel in London. It gained $1.68 the previous session to $74.28.

The dollar declined to 138.74 yen from Thursday’s 138.86 yen. The euro edged up to $1.0765 from $1.0762.

World

Associated Press

Stock market today: World shares are mostly higher after S&P 500 sets another record

BANGKOK (AP) — European shares opened higher after a mixed trading session in Asia on Thursday following another record close for the S&P 500. Germany’s DAX added 0.1% to 18,500.63. In Paris, the CAC 40 gained 0.4% to 8,240.07. In London, the FTSE 100 was up 0.3% at 7,957.26. The future for the S&P 500 […]

8 hours ago

Associated Press

U.S. congressional delegation pledges continued defense support for Taiwan

TAIPEI, Taiwan (AP) — A bipartisan U.S. congressional delegation pledged continued support for Taiwan on Thursday, days after Congress approved $300 million in military aid for the self-governed island that’s claimed by China. Congress also approved $400 million on Saturday to counter the Chinese government’s influence in the region, as part of its Defense Appropriations […]

9 hours ago

Associated Press

Greek police clash with demonstrators protesting a concert by US military cadets

ATHENS, Greece (AP) — Police in Greece clashed late Wednesday with Communist-backed demonstrators who tried to prevent a concert by U.S. military cadets. The violent protest occurred in the central Greek city of Larissa ahead of a concert by members of the West Point Glee Club, a musical group of the U.S. Military Academy which […]

17 hours ago

Associated Press

Israeli strikes in Lebanon kill 16, militant rockets kill 1 Israeli as cross-border violence soars

HEBBARIYE, Lebanon (AP) — A series of Israeli airstrikes in southern Lebanon killed 16 people and a barrage of rockets fired by the militant group Hezbollah killed one Israeli man, making Wednesday the deadliest day in more than five months of fighting along the border. Since the outbreak of the Israel-Hamas war in Gaza, concerns […]

1 day ago

Associated Press

Stock market today: World shares are mixed after Wall Street retreats from all-time highs

BANGKOK (AP) — World shares were mixed on Wednesday after Wall Street slipped a bit further from its record highs. Germany’s DAX added 0.5% to 18,467.35 and the CAC 40 in Paris was up 0.2%, at 8,202.64. In London, the FTSE 100 slipped 0.3% to 7,907.24. The future for the S&P 500 gained 0.4% while […]

1 day ago

Associated Press

With its soldiers mired in Gaza, Israel fights a battle at home over drafting the ultra-Orthodox

JERUSALEM (AP) — As Israel battles a prolonged war in Gaza, broad exemptions from mandatory military service for ultra-Orthodox men have reopened a deep divide in the country and rattled the government coalition, with Prime Minister Benjamin Netanyahu’s fellow War Cabinet members staunchly opposed to his proposed new conscription law. By the end of the […]

2 days ago

Stock market today: Asia follows Wall St up on hopes Fed will ease off rate hikes