Stock market today: Asia is trailing Wall St in hopes the Fed will ease rate hikes

BEIJING (AP) Asian stock markets trailed Wall Street higher Friday ahead of an update on the U.S. jobs market after Federal Reserve officials renewed hope that another rate hike could be delayed and lawmakers gave final approval to a deal to make a . prevent default of the national debt.

Shanghai, Tokyo, Hong Kong and Seoul advanced. Oil prices strengthened.

Wall Street’s benchmark S&P 500 index rose 1% on Thursday after data showed manufacturing and retail activity weakening. That bolstered hopes that the Fed would decide that upward price pressures are easing and that more rate hikes can be postponed or tapered.

“Skipping a rate hike at this month’s Fed meeting would allow policymakers to see more data before making decisions,” said a board member, Philip Jefferson. Federal Reserve Bank of Philadelphia president Patrick Harker made similar comments.

The statements fueled the prospect of skipping an increase after strong jobs numbers fueled fears of further increases last week, ING’s James Knightley said in a report.

A currency trader looks at monitors in front of screens showing the Korea Composite Stock Price Index (KOSPI), top left, and the exchange rate between the US dollar and the South Korean won in the currency trading room of KEB Hana Bank headquarters in Seoul, South Korea , Thursday, June 1, 2023. Asian benchmarks were mostly higher on Thursday after the US House of Representatives approved a debt ceiling and austerity package, avoiding a default crisis. (AP Photo/Ahn Young-joon)

Photo: ASSOCIATED PRESS/Ahn Young-joon

A currency trader talks on the phone near screens showing the Korea Composite Stock Price Index (KOSPI), top left, and the exchange rate between the US dollar and the South Korean won in the currency trading room of KEB Hana Bank headquarters in Seoul , South Korea, Thursday, June 1, 2023. Asian benchmarks were mostly higher on Thursday after the US House of Representatives passed a debt ceiling and austerity package that prevented a default crisis. (AP Photo/Ahn Young-joon)

Photo: ASSOCIATED PRESS/Ahn Young-joon

FILE – An NYSE sign is seen on the floor of the New York Stock Exchange in New York, Wednesday, June 15, 2022. (AP Photo/Seth Wenig, File)

Photo: ASSOCIATED PRESS/Seth Wenig

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However, Knightley said, if a monthly report from the US government due Friday shows that the labor market is still strong, it could easily lead to a hike.

Late Thursday night, the Senate gave final approval to a deal to increase the amount the government can borrow in exchange for spending cuts.

The widely anticipated move ended the threat of default that rocked the market last week before President Joe Biden and Speaker Kevin McCarthy of the House of Representatives reached a compromise.

The Shanghai Composite Index gained 0.7% to 3,226.58 and the Nikkei 225 in Tokyo gained 0.8% to 31,384.93. The Hang Seng in Hong Kong rose 3.4% to 18,833.15.

The Kospi in Seoul rose 0.9% to 2,591.48 and the S&P ASX 200 in Sydney was up 0.3% at 7,130.20.

New Zealand fell back as Bangkok advanced. Markets in Singapore and Indonesia were closed for holidays.

On Wall Street, the S&P 500 rose to 4,221.02. The Dow Jones Industrial Average gained 0.5% to 33,061.57 and the Nasdaq index jumped 1.3% to 13,100.98.

While the agreement on avoiding US debt has been positive for the market, investors are more concerned whether the economy goes into recession before inflation eases enough to convince the Fed to ease rate hikes.

This was revealed in a report on Thursday fewer workers applied for unemployment benefits last week than expected, while another suggested employers increased their payrolls by more than expected last month.

That’s good news for workers and the economy in general, but the Fed fears that a strong labor market could also keep inflation under pressure.

Production contracted for a seventh month in May, according to a report from the Institute for Supply Management. The contraction was worse than the previous month and what economists had expected.

However, following those reports, traders largely bet on the Fed holding rates steady Jefferson also said that wouldn’t necessarily mean the end of walks.

Apple, Microsoft and Amazon all rose at least 1.3%. Their moves weigh extra heavily on the S&P 500 because they are among the most valuable on Wall Street.

Dollar General fell 19.5% after the retailer reported weaker earnings and sales for the last quarter than analysts had expected. It serves lower-income households.

Macy’s, which also owns Bloomingdale’s stores, rose 1.2% after reporting better-than-expected earnings but weaker-than-expected sales. It too lowered expectations for the year and said shoppers began to pull back from March.

Part of the enthusiasm surrounding Wall Street’s recent madness artificial intelligence also chilled.

C3.ai gave a revenue forecast for this upcoming fiscal year that Wall Street failed to amaze like Nvidias did last week. C3.ai was down 13.2%, though it’s still up 210% year-to-date. Nvidia rose 5.1%.

In the energy market, benchmark US crude rose 38 cents to $70.48 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.01 to $70.10 on Thursday. Brent crude, the price base for international oil trade, rose 42 cents to $74.70 a barrel in London. It gained $1.68 to $74.28 the previous session.

The dollar fell from 138.86 yen on Thursday to 138.74 yen. The euro rose from $1.0762 to $1.0765.

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