Asian markets opened higher after a positive close on Wall Street. Investors are eagerly awaiting the crucial US inflation report later in the day, which is likely to set the trend Federal Reserve The closing meeting for this year is on Wednesday.
US futures and oil prices rose.
The Nikkei 225 index in Tokyo added 0.5% to 32,959.50 points. Data released Tuesday showed that Japan’s wholesale prices rose 0.3% from a year earlier in November, marking the slowest rate of increase in nearly three years, indicating moderation in inflationary pressures in the economy.
Hong Kong’s Hang Seng rose 1.1% to 16,367.00, and the Shanghai Composite rose 0.1% to 2,993.65.
Chinese leaders are holding an annual economic conference that is expected to conclude on Tuesday with pledges to stimulate stable growth.
In Seoul, the KOSPI rose 0.4% to 2,534.15. In Australia, the S&P/ASX 200 index rose 0.5% to 7,233.90 points.
India’s Sensex rose 0.2%, while Bangkok’s CET lost 0.3%.
On Monday, the S&P 500 rose 0.4% to 4,622.44, closing at a 20-month high. The Dow Jones index gained 0.4% to 36,404.93, and the Nasdaq index added 0.2%, closing at 14,432.49.
The muted gains follow a six-week winning streak for major stock indexes. The S&P 500 rose 20.4% during the year, and the Nasdaq rose 37.9%.
Cigna stock rose 16.7% to post the biggest gain among S&P 500 stocks after the health insurer announced a $10 billion stock buyback and the Wall Street Journal reported that the company was no longer seeking a merger with Humana.
Macy’s stock jumped 19.4% after reports that an investor group is launching a bid to acquire the iconic retailer for $5.8 billion.
The government is scheduled to release its November report on Tuesday Consumer inflation. Analysts expect the report to show that inflation continued to slow to 3.1% from 3.2% in October. On Wednesday, the government will release its November report on wholesale inflation, which is also expected to show that the inflation rate is falling.
Wall Street is betting overwhelmingly on that The Fed will maintain its benchmark interest rate in a range of 5.25% to 5.50% in early 2024 and could start cutting interest rates by the middle of that year. Analysts are also becoming more comfortable with the possibility that the central bank can achieve a “soft landing,” which refers to declining inflation in light of high interest rates, without the economy falling into recession.
“With inflation declining faster than expected, the Fed now appears likely to refrain from raising interest rates further,” Brian Rose, chief US economist at UBS, said in a note to investors. “At the same time, inflation remains too high and the labor market is still too tight for the Fed to consider cutting interest rates soon.”
Strong consumer spending and a strong jobs market have provided a bulwark to the broader economy, where growth has slowed but avoided stalling so far. Friday’s government jobs report showed that US employers added more jobs last month than economists expected. Workers’ wages also rose more than expected, and the unemployment rate unexpectedly improved.
Many major companies will announce their earnings this week, and they are among the few remaining to announce their results. Software company Adobe will report on Wednesday and Olive Garden owner Darden Restaurants will release its results on Friday.
Treasury yields were little changed. The yield on 10-year Treasury bonds settled at 4.22%.
In energy trading, US crude oil added 25 cents to $71.57 a barrel in electronic trading on the New York Mercantile Exchange. It rose 0.1% on Monday. Brent crude, the international standard, rose 24 cents to $76.27 a barrel.
The US dollar fell to 145.60 Japanese yen from 146.16 yen. The euro rose to $1.0769 from $1.07613.
___
AP Business Writers Alex Veiga and Damian J. Troise contributed.
“Infuriatingly humble alcohol fanatic. Unapologetic beer practitioner. Analyst.”