Asian stocks traded in narrow ranges early Wednesday as investors waited for direction after US benchmarks wiped out their 2025 losses on signs trade tensions are easing and after US inflation was softer than forecast.
Equities edged lower in Japan — with the Topix halting a 13-day rally — and also edged down in Australia. US stock index futures were little changed after chipmakers led Tuesday’s rally on Wall Street following news Nvidia Corp. and Advanced Micro Devices Inc. will supply semiconductors to Saudi Arabian firm Humain for a data-center project. The dollar and Treasuries were both little changed.
Asian investors will be on the watch for Chinese tech stocks as the nation’s most valuable company, Tencent Holdings Ltd. announces its earnings Wednesday and Alibaba Group Holding Ltd. will report the following day. The earnings may reveal how the sector’s two largest companies are coping with the uncertain geopolitical outlook, and give a guide as to whether Chinese tech stocks may resume their rally.
“The bounce from the US-China trade detente is fading fast,” said Frederic Neumann, chief Asia economist at HSBC Holdings Plc in Hong Kong. “Investors continue to worry about lingering trade uncertainty, with many more difficult negotiations lying ahead. Moreover, even if US-China trade tensions have eased, there are signs that the global economy faces stiffening headwinds.”
The Bloomberg Dollar Spot Index was little changed Wednesday after dropping 0.7% in US hours following the soft US inflation data. The Treasury 10-year yield held at 4.47%.
The S&P 500 closed 0.7% higher, while the Nasdaq 100 climbed 1.6%. The Bloomberg Magnificent Seven index of megacaps added 2.2%.
The easing of trade tensions and a surprisingly positive US earnings season have spurred optimism after a period of doubt about Corporate America’s ability to meet high profit expectations. The stock market is “gonna go a lot higher,” President Donald Trump said, citing an “explosion of investment and jobs” as he said Saudi Arabia would commit to investing $1 trillion in the US.
The Trump administration plans to overhaul regulations on the export of semiconductors used in artificial intelligence, tossing out a Biden-era approach that had drawn strenuous objections from America’s allies. The US is also weighing a deal that would allow the United Arab Emirates to import more than a million advanced Nvidia chips, people familiar with the matter said.
Subdued Inflation
US inflation rose by less in April than economists forecast amid tame prices for clothing and new cars, suggesting little urgency so far by companies to pass along the cost of higher tariffs to consumers.
The temporary agreement reached over the weekend to de-escalate the trade war with China has largely scaled back projections of how much damage tariffs will inflict on the economy. JPMorgan Chase & Co. boosted its forecast for US growth, dropping its earlier call that the world’s largest economy would sink into a recession in 2025.
While derivative contracts continue to price in two quarter-point rate cuts by the Fed this year, several major Wall Street banks this week forecast a rate cut in December, later than they previously anticipated.
Oil steadied after the biggest four-day rally since October, spurred by trade-war optimism and Trump’s increasingly hostile rhetoric on Iranian supply. Gold held a small gain after US inflation data came in weaker than expected, spurring traders to shore up bets on Federal Reserve interest-rate cuts.
Equities edged lower in Japan — with the Topix halting a 13-day rally — and also edged down in Australia. US stock index futures were little changed after chipmakers led Tuesday’s rally on Wall Street following news Nvidia Corp. and Advanced Micro Devices Inc. will supply semiconductors to Saudi Arabian firm Humain for a data-center project. The dollar and Treasuries were both little changed.
Asian investors will be on the watch for Chinese tech stocks as the nation’s most valuable company, Tencent Holdings Ltd. announces its earnings Wednesday and Alibaba Group Holding Ltd. will report the following day. The earnings may reveal how the sector’s two largest companies are coping with the uncertain geopolitical outlook, and give a guide as to whether Chinese tech stocks may resume their rally.
“The bounce from the US-China trade detente is fading fast,” said Frederic Neumann, chief Asia economist at HSBC Holdings Plc in Hong Kong. “Investors continue to worry about lingering trade uncertainty, with many more difficult negotiations lying ahead. Moreover, even if US-China trade tensions have eased, there are signs that the global economy faces stiffening headwinds.”
The Bloomberg Dollar Spot Index was little changed Wednesday after dropping 0.7% in US hours following the soft US inflation data. The Treasury 10-year yield held at 4.47%.
The S&P 500 closed 0.7% higher, while the Nasdaq 100 climbed 1.6%. The Bloomberg Magnificent Seven index of megacaps added 2.2%.
The easing of trade tensions and a surprisingly positive US earnings season have spurred optimism after a period of doubt about Corporate America’s ability to meet high profit expectations. The stock market is “gonna go a lot higher,” President Donald Trump said, citing an “explosion of investment and jobs” as he said Saudi Arabia would commit to investing $1 trillion in the US.
The Trump administration plans to overhaul regulations on the export of semiconductors used in artificial intelligence, tossing out a Biden-era approach that had drawn strenuous objections from America’s allies. The US is also weighing a deal that would allow the United Arab Emirates to import more than a million advanced Nvidia chips, people familiar with the matter said.
Subdued Inflation
US inflation rose by less in April than economists forecast amid tame prices for clothing and new cars, suggesting little urgency so far by companies to pass along the cost of higher tariffs to consumers.
The temporary agreement reached over the weekend to de-escalate the trade war with China has largely scaled back projections of how much damage tariffs will inflict on the economy. JPMorgan Chase & Co. boosted its forecast for US growth, dropping its earlier call that the world’s largest economy would sink into a recession in 2025.
While derivative contracts continue to price in two quarter-point rate cuts by the Fed this year, several major Wall Street banks this week forecast a rate cut in December, later than they previously anticipated.
Oil steadied after the biggest four-day rally since October, spurred by trade-war optimism and Trump’s increasingly hostile rhetoric on Iranian supply. Gold held a small gain after US inflation data came in weaker than expected, spurring traders to shore up bets on Federal Reserve interest-rate cuts.
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