HONG KONG (AP) – Asian stocks were mostly higher Wednesday following a rally on Wall Street that saw the Nasdaq Composite Index hit a record high.
Tuesday’s report showed prices remained high at the U.S. wholesale level before many price changes were passed on to consumers, with the producer price index hitting 0.5% in April, higher than expected. It was shown that
Inflation is on track to rise in 2024, raising concerns that the Federal Reserve will struggle to keep inflation at its 2% target.
But comments from Federal Reserve Chairman Jerome Powell reassured investors. Speaking at a panel discussion in Amsterdam on Tuesday, he reaffirmed that the U.S. central bank is unlikely to raise key interest rates in response to stubborn inflation. But he also said confidence that inflation would ease was “not as high as it used to be” given the persistence of price increases in the first three months of the year.
A bigger test for markets will be later on Wednesday when the U.S. is scheduled to release its monthly update on consumer prices, or the inflation faced by households. Economists expect the consumer price index to fall by 3.4% in April from a year ago.
In Asian trading, Tokyo’s Nikkei stock average rose 0.4% to 38,491.15, while Australia’s S&P/ASX 200 index rose 0.4% to 7,760.40.
In China, the Shanghai Composite Index fell 0.4% to 3,133.47 after the People’s Bank of China kept its key lending rate unchanged on Wednesday, showing the Chinese government’s focus on maintaining financial stability.
Elsewhere, Taiwan’s Thai Ex rose 1.4%, while Bangkok’s SET was almost flat.
Markets in South Korea and Hong Kong were closed for public holidays.
On Tuesday, the S&P 500 rose 0.5% to 5,246.68 and the Dow Jones Industrial Average rose 0.3% to 39,558.11.
The Nasdaq Composite Index, which is heavily influenced by tech stocks, rose 0.8% to 16,511.18. Much of the market’s overall gains this year have been driven by the tech sector.
Several “meme” stocks, including GameStop and AMC Entertainment, soared in a repeat of the social media-driven frenzy of three years ago. GameStop rose 60.1% and AMC rose 32%. Both stocks regained much of their gains from earlier in the day.
Bond yields fell slightly. The yield on the 10-year U.S. Treasury note fell to 4.44% from 4.49% late Monday.
Investors are tempering expectations for the speed and frequency of rate cuts this year as inflation remains higher than expected. Traders are betting on one or two rate cuts this year, according to CME Group data.
Wall Street is still hoping the Fed can pull off a “soft landing” where high interest rates curb inflation without slowing the economy into recession. Although the economy remains strong, consumers may be showing signs of fatigue under the weight of stubborn inflation. Economists expect Wednesday’s retail sales report to show consumer spending softened in April, similar to previous months.
In other trading, benchmark U.S. crude oil rose 72 cents to $78.74 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard crude, rose 65 cents to $83.03 per barrel.
In currency trading, the dollar fell from 156.42 yen to 156.38 yen. The euro rose to $1.0824 from $1.0820.
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AP Business Writer Damian Troise contributed.
