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Asian shares were mostly higher on Monday after U.S. stocks recovered from Wall Street’s worst day since April and rose throughout the week.
U.S. futures fell, but oil prices rose.
Tokyo’s Nikkei stock average rose 0.3% to 38,758.96, while Seoul’s KOSPI added 0.7% to 2,705.87.
Australia’s S&P/ASX 200 rose 0.7 percent to 2,705.87 and the Shanghai Composite Index rose 0.3 percent to 3,097.86 after the government said corporate profits rose 4.3 percent in April from a year earlier.
Hong Kong’s Hang Seng Index fell 0.2% to 18,576.65.
Taiwan led the gains, with heavy buying of computer chip stocks helping push its index up 1.3% to a record high. Semiconductor company MediaTek, which makes chips for wireless communications, high-definition TVs and handheld mobile devices, rose 8.4%.
Taiwan Semiconductor Manufacturing Co. (TSMC) rose slightly, up 0.5%.
“A strong global semiconductor cycle is positive for Taiwan’s growth prospects,” ANZ’s Raymond Yun and Bansi Madhvani wrote in a research note. “The global semiconductor cycle is buoyed by advances in artificial intelligence applications, cloud computing and 5G communications technology,” they said.
On Friday, the S&P 500 rose 0.7% to 5,304.72, clawing back all of the losses from the previous two days, and is up only slightly this week, extending its weekly gain to five and remaining just below the record high recorded on Tuesday.
The Dow Jones Industrial Average rose less than 0.1%, to 39,069.59, and the Nasdaq Composite rose 1.1%, to 16,920.79, surpassing the all-time high it hit earlier this week.
Nvidia rose another 2.6% on Friday, making it the biggest driver of the S&P 500’s gains.
The stock’s volatility this week came despite a stunning new profit report from Nvidia, which has catapulted the company into one of Wall Street’s most influential stocks amid a frenzy around artificial intelligence technology. While the frenzy around AI has driven some stocks to heights that critics say are overdone, Nvidia’s impressive growth and prospects for further growth suggest the company may keep on growing.
While the overall U.S. economy suggests that spending by American households remains strong, the numbers below the surface may not be as encouraging.
On Friday, markets rose slightly on a report that overall sentiment among U.S. consumers in May was not as weak as preliminary data had suggested. Perhaps more importantly, the University of Michigan report also said that U.S. consumers’ inflation expectations for the year ahead did not rise as much in May as initially feared.
Doing so could help stave off a vicious cycle in which American households’ inflation expectations rise and they take actions that only make inflation worse.
Concerns about persistently high inflation were behind this week’s volatile trading after the index recently hit a record high. The weakness began after the Federal Reserve released minutes from its last policy meeting on Wednesday, which showed some officials talking about potentially raising interest rates if inflation worsens.
Stocks fell further after reports on Thursday showed the U.S. economy performing better than expected. Such strength could really spook Wall Street, as it could keep up upward pressure on inflation.
That could delay cuts to the Federal Reserve’s key interest rate, which is at its highest in more than two decades, as the central bank tries to navigate the tricky task of slowing the economy enough to keep high interest rates in check, but not so much that it crushes the job market.
Those concerns sent Treasury yields higher last week, but they were little changed Friday after the consumer confidence report. The 10-year Treasury yield fell to 4.46% from 4.48% late Thursday. The 2-year yield, which better reflects expectations of Fed action, was flat at 4.94%.
Benchmark U.S. crude rose 21 cents to $77.93 a barrel in electronic trading on the New York Mercantile Exchange, after gaining 85 cents on Friday.
Brent crude, the international standard, rose 21 cents to $82.05 a barrel.
In the foreign exchange market, the US dollar fell from 156.99 yen to 156.77 yen.
The euro rose to $1.0851 from $1.0844.
