Stock market today: Asian shares rise after Wall Street sets another record

TOKYO — Asian shares were mostly higher on Friday after US stocks climbed to records as easier interest rates beckoned on the horizon.

Japan’s benchmark Nikkei 225 added 0.2% to end at 39,688.94. Sydney’s S&The P/ASX 200 rose 1.1% to 7,847.00. South Korea’s Kospi rose 1.1% to 2,677.22. Hong Kong’s Hang Seng rose 1.3% to 16,441.68, while the Shanghai Composite pared early losses to edge 0.5% higher at 3,043.36.

Although economic data from regions such as China remained relatively positive, investors remained cautious. Higher interest rates, for example, could be on the horizon in Japan once the economy picks up.

“This was driven by reports from Bank of Japan officials feeling more confident about wage growth as cash labor income performed better,” said Tan Boon Heng of Mizuho Bank in Singapore.

On Wall Street, the S&The P500 rose 1% to reach its 16th all-time high this year. It has had a great run and is on course for its 17th winning week in the last 19 after erasing the latest losses on Monday and Tuesday.

The Dow Jones Industrial Average added 130 points, or 0.3%, and the Nasdaq composite rose 1.5% to finish just below its record.

Federal Reserve Chairman Jerome Powell said in testimony on Capitol Hill that the central bank is “not far” away from making the interest rate cuts Wall Street is craving. He again said the Fed is just waiting for additional data to confirm that inflation is cooling.

It’s a key issue on Wall Street because interest rate cuts would ease pressure on the economy and financial system while increasing investment prices. After abandoning earlier hopes for cuts in March, traders now see June as the most likely entry point. The Fed’s key interest rate is at its highest level since 2001.

After facing criticism for waiting too long to raise rates while inflation was accelerating, Powell faced questions from the Senate Banking Committee about the possibility that it could be too late to cut rates. That would cause unnecessary pain because high interest rates slow down the economy.

“We are obviously well aware of that risk,” Powell said.

He said if conditions continue as expected, including a strong labor market and cooling inflation, cuts would come later this year. Cutting interest rates too early could risk inflation accelerating again.

Government bond yields fell in the bond market after a number of reports gave potential signals of reduced pressure on inflation.

The yield on the 10-year government bond fell to 4.08% from 4.11% late Wednesday. Interest rates have generally been falling since peaking at 5% last fall, which could spur borrowing across the economy and investors to pay higher prices for stocks. Two-year Treasury yields, which are closer to Fed expectations, fell even further.

Across the Atlantic, traders were also trying to guess when the European Central Bank will start cutting interest rates after the president said he was making progress in bringing inflation under control.

According to one report, slightly more U.S. workers filed for unemployment benefits last week than expected, though the number remains low compared to history.

A potentially more impactful report will be released Friday morning, when the U.S. government will provide its final monthly update on the labor market. The hope among investors is that the labor market will remain healthy, but not so much that this will prevent the Federal Reserve from cutting interest rates.

On Wall Street, Nvidia was once again the strongest force holding the S&P500 up and climbed 4.5%. It’s up 87% this year, after more than tripling last year amid Wall Street’s frenzy over artificial intelligence technology.

All in all, the S&The P500 rose 52.60 points to 5,157.36. The Dow Jones gained 130.30 to 38,791.35 and the Nasdaq index climbed 241.83 to 16,273.38.

In energy trading, U.S. crude rose 66 cents to $79.59 a barrel. Brent crude, the international standard, rose 57 cents to $83.53 a barrel.

In currency trading, the US dollar was unchanged at 147.90 Japanese yen. The euro cost $1.0949, down from $1.0951.