Asian shares rose on Thursday after a crushing rally on Wall Street, with Japan’s Nikkei 225 index breaking above 42,000 for the first time.
Futures for the Dow Jones Industrial Average and the S&P500 decreased by 0.1%.
The Nikkei 225 rose 0.9% to close at 42,224.02, surpassing its all-time high again after closing at record highs on Tuesday and Wednesday.
There was heavy buying in a wide range of stocks, with electronics makers leading the gains. Sony Group Corp. rose 3.6% and Disco Corp., which makes precision tools, rose 3.4%. Electrical components maker Murata Manufacturing Corp. rose 2.8%.
Elsewhere in Asia, Hong Kong’s Hang Seng rose 2.1% to 17,831.40 and the Shanghai Composite index rose 1.1% to 2,970.39.
In Seoul, the Kospi rose 0.8% to 2,891.35.
Australia’s S&P/ASX 200 rose 0.9% to 7,889.60. Taiwan’s Taiex rose 1.6% while Taiwan Semiconductor Manufacturing Corp. jumped 3.4%.
TSMC’s U.S.-listed shares rose 3.5% on Wednesday after the company said revenue rose nearly 33% in June from a year earlier. The company makes chips for Nvidia and other factors that have fueled the rush to adopt artificial intelligence technology in the business world.
The promise of big profits in the AI future has driven Nvidia in particular to breathtaking heights over the past year, and Nvidia rose another 2.7% on Wednesday to take its year-to-date gains to 172.5%. It was once again the strongest single force driving the S&P500 up as Wall Street rally extends into seventh day big tech companies led the way.
The US stock market hit new record highs on Wednesday, led by big technology companies whose shares soared on the hype surrounding artificial intelligence.
Hopes for rate cuts also pushed markets higher.
The S&P500 rose 1% to breach the 5,600 level for the first time, closing at 5,633.91.
The Nasdaq Composite rose 1.2% to 18,647.45 and the Dow Jones Industrial Average rose 1.1% to 39,721.36.
Advanced Micro Devices was another major driver of the stock market jump. The company rose 3.9% after announcing a $665 million deal to acquire Silo AI, a European AI lab.
Markets have broken records despite a slowing US economy and tightening pressure on lower income households.
Hopes that inflation The slowdown in the economy means the Federal Reserve can make the desired rate cuts later this year, which also fuels buying enthusiasm.
Fed Chairman Jerome Powell returned to Capitol Hill to testify on interest rates, repeating many of his own statements. comments from the day before. He said he was “not giving any signals” about when rate cuts might come, but he did point out the downsides of being late.
“More good data would boost our confidence” and pave the way for a cut, Powell said.
Much of Wall Street expects the Fed to begin cutting key rates in September, but traders have a long history of being obviousPowell acknowledged that inflation has improved recently, but reiterated that the Fed is not confident inflation will sustainably reach its 2% target.
Later on Thursday, the U.S. government will release its latest monthly update on inflation. Economists expect it to show that American consumers paid 3.1 percent more for food, airfare and everything else in June than a year earlier. That would be slightly slower than the 3.3 percent inflation rate in May.
“With the Federal Reserve … looking to see ‘more good data,’ US inflation will play a key role in validating whether markets are getting ahead of themselves by cutting rates as early as September this year,” IG’s Yeap Jun Rong said in a commentary.
Later this week will also see the unofficial start of the latest earnings reporting season. Delta Air Lines, JPMorgan Chase and others will report how much profit they made during the April-June spring, and the hope on Wall Street is that S&P 500 companies deliver strongest growth in more than two years.
In other trading, benchmark U.S. crude rose 60 cents to $82.70 a barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, the international standard, rose 63 cents to $85.71 a barrel.
The US dollar fell to 161.75 Japanese yen from 161.66 yen. The euro rose to 1.0837 dollars from 1.0832.