Stocks in Asia are poised to open higher after a rally in technology stocks pushed the S&P 500’s gains since an October low past 20%, the marker of a bull market.
Futures for benchmarks in Australia, Japan and Hong Kong advanced with a regional index set for its second weekly gain. Contracts on US indexes were little changed in early trading in Asia.
A jump in US jobless claims to the highest since October 2021 showed the labor market is starting to show signs of cooling, helping fuel the rally in tech stocks, which had faced headwinds from speculation the Federal Reserve will keep interest rates higher for longer.
“It’s still at pretty low levels in terms of initial claims. But maybe the fact that it’s perked up on a week-over-week basis gives the Fed a little bit more fodder to pause next week,” said Emily Roland, co-chief investment strategist of John Hancock Investment Management, in an interview at Bloomberg’s New York office.
The S&P 500 added 0.6% and the tech-heavy Nasdaq 100 rose 1.3% as chipmakers including Nvidia Corp. and Advanced Micro Devices Inc. were among the biggest gainers amid the frenzy in stocks linked to artificial intelligence.
The dollar weakened as Treasury yields fell, the yen strengthened and oil is set for a second weekly drop after shrugging off Saudi Arabia’s pledge to cut output.
On the day ahead, Chinese inflation will be in focus. Consumer prices were probably almost flat again in May, reinforcing the need for further stimulus. Producers are expected to deepen their slide.
Investors are reassessing the trajectory of Fed policy after central banks in Australia and Canada this week unexpectedly raised rates. Traders had fully priced in another hike by July on Wednesday. However, Evercore ISI’s Krishna Guha said market moves based on those central bank actions should fade.
“The Fed is the price-setter here, the others are the price-takers, and we should not confuse the two,” Guha said. “They are raising rates in part because they think the Fed will hike once more and if they fail to match this they risk FX depreciation.”
In currencies, the yen strengthened after Japan’s economy grew faster than expected in the first quarter. The Turkish lira stabilized against the dollar after state lenders began supporting the currency again. And in commodities, oil traded in New York shed 1.7% to $71.29 a barrel.
Key events this week:
- China PPI, CPI, Friday
Stocks
- Hang Seng futures rose 0.7% as of 7:03 a.m. Tokyo time
- Nikkei 225 futures rose 0.7%
- S&P/ASX 200 futures rose 0.4%
- S&P 500 futures were little changed. The S&P 500 rose 0.6%
- Nasdaq 100 futures were little changed. The Nasdaq 100 rose 1.3%
Currencies
- The Bloomberg Dollar Spot Index fell 0.6%
- The euro was little changed at $1.0783
- The yen was little changed at 138.91 per dollar
Cryptocurrencies
- Bitcoin fell 0.3% to $26,577.05
- Ether was little changed at $1,851.67
Bonds
- The yield on 10-year Treasuries declined eight basis points to 3.72%
Commodities
- West Texas Intermediate crude fell 0.4% to $71.02 a barrel
- Spot gold was unchanged at $1,965.46 an ounce
This story was produced with the assistance of Bloomberg Automation.
--With assistance from Carly Wanna and Isabelle Lee.
