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Asian stocks rose on Tuesday as Wall Street recovered, recouping almost all of its losses from a weak start to the year.
US futures and oil prices fell.
The Nikkei 225 index in Tokyo rose 1.2% to 33,763.18 after the market reopened on Monday following a holiday.
Hong Kong's Hang Seng gained 0.3% to 16,267.72, regaining some ground lost in recent declines. The Shanghai Composite Index rose 0.4% to 2,896.11.
South Korea's Kospi fell 0.3% to 2,561.24, while Australia's S&P/ASX 200 rose 0.9% to 7,520.50.
Wall Street posted broad gains on Monday as falling Treasury yields eased pressure on the stock market. The rally was led by Big Tech stocks, the main driver of Wall Street's big rally last year as excitement over artificial intelligence technology ensured that just a handful of stocks accounted for the bulk of the S&P 500's returns . But they stumbled last week when markets were broadly bearish.
The S&P 500 rose 1.4% to 4,763.54. It is back within 0.7% of its record level and has regained momentum after posting its first losing week in the last 10 years.
The Nasdaq Composite rose 2.2% to 14,843.77, while the Dow Jones Industrial Average lagged the market, rising 0.6% to 37,683.01.
Boeing weighed on the Dow in its first trading after one of its jets suffered an accident while flying over Oregon. It fell 8%. Spirit AeroSystems, which builds fuselages and other parts for Boeing, fell 11.1%.
Shares of oil and gas companies were also a heavyweight after Saudi Arabia hinted at potentially weak demand for crude and cut prices for its oil for February delivery. Exxon Mobil fell 1.7% and Marathon Oil lost 2.7% as a barrel of U.S. crude fell $3.04 to $70.77.
“Weak demand fundamentals influenced this decision in the global physical oil market. Although the price cuts were widely expected, they were larger than analysts had forecast,” Stephen Innes of SPI Asset Management said in a commentary.
Nvidia rose 6.4% after announcing several AI-related products. Apple, on the other hand, rose 2.4%, recovering from its worst week since September. They were the strongest forces driving the S&P 500 along with Microsoft, Amazon and Alphabet.
Commercial Metals also rose 7.5% after reporting higher-than-analysts expected earnings for the latest quarter. It said construction activity in North America was healthy, boosting demand for steel and helping to offset weaker conditions in Europe.
Further earnings results will be available at the end of the week. Delta Air Lines, JPMorgan Chase and UnitedHealth Group are among the companies opening the S&P 500 earnings season for the final three months of 2023 on Friday.
The highlight of the week could be the release of the latest U.S. consumer inflation data on Thursday. A slowdown there has raised hopes on Wall Street that the Federal Reserve will soon see enough improvement to not just stop raising interest rates but start cutting them.
Hoping to combat high inflation, the Fed has already raised its key interest rate to its highest level since 2001, weighing on the economy and weighing on investment prices.
Due to these expectations, government bond yields have already fallen in the bond market and fell slightly on Monday. The yield on the 10-year Treasury note fell to 4.01% from 4.05% late Friday. In October it was above 5%, the highest level since 2007, putting strong downward pressure on the stock market.
Critics are also warning traders not to be too optimistic about how much the Federal Reserve might cut interest rates this year. The Fed has hinted at the possibility of three rate cuts, but many traders expect at least six. Such a large number may not be likely unless a recession forces the Fed to act, critics say.
For this reason, there is a lot of focus on corporate earnings, the growth of which could help support share prices.
Benchmark U.S. crude oil fell 20 cents to $70.57 a barrel in electronic trading on the New York Mercantile Exchange. On Monday, it lost $2.84 to $70.77 a barrel.
Brent crude, the international standard, lost 7 cents to $76.05 a barrel.
The US dollar fell to 143.93 Japanese yen from 144.23 yen. The euro rose from $1.0949 to $1.0955.
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