“All eyes will be on Japan’s Nikkei average, with tech stocks holding firm overnight while the Japanese yen is trading at a 38-year low and could continue to rise above the 40,000 yen mark,” said Yep Jun Rong, market analyst at IG.
In currency markets, the U.S. dollar rose to 161.63 yen from 161.43 yen. The euro was little changed to $1.0747 from $1.0749. Among technology stocks in Tokyo, Kyocera rose 2.2% in morning trading, while Murata Manufacturing surged 5.2%.
On Wall Street, the S&P 500 rose 0.6% to 5,509.01, beating the all-time high it set two weeks ago. The Dow Jones Industrial Average rose 0.4% to 39,331.85 and the Nasdaq Composite rose 0.8% to 18,028.76, beating its own record set the previous day.
Electric-car maker Tesla Inc. led the way with a 10.2% rise after the company said its spring sales fell less than analysts had expected. Small gains in other big heavyweights, including Apple Inc.’s 1.6% gain, also helped lift the market.
Treasury yields fell and stocks rose after Federal Reserve Chairman Jerome Powell signaled investors could see interest rate cuts this year, acknowledging an improvement in inflation readings that were disappointingly high at the start of the year.
“We just want to understand that what we are seeing now is the true value of underlying inflation,” he said during a panel discussion at the European Central Bank’s monetary policy meeting in Sintra, Portugal.
Investors are hoping inflation will slow enough to convince the Fed to cut its key interest rate, which is at its highest in more than two decades and is putting a brake on the economy.
Capturing Wall Street’s gains has been one of this year’s brightest stars, Nvidia: The company fell 1.3% but is still up nearly 147.7% so far this year.
Eli Lilly shares fell 0.8% and Novo Nordisk’s U.S.-listed shares fell 1.7% after President Biden wrote an opinion piece in USA Today criticizing how the companies charge high prices for weight-loss and diabetes medications.
The most closely watched economic data of the week is due to be released on Friday, when the U.S. government will announce how many jobs employers added in June. Until then, U.S. stock markets will have shortened trading hours on Wednesday and Thursday for the Independence Day holiday.
Treasury yields have come under upward pressure recently because of politics. Last week’s debate between President Joe Biden and former President Donald Trump prompted traders to make moves in anticipation of a possible Republican sweep in November. This included higher Treasury yields due in part to possible policies that would further increase the U.S. government’s debt.
The yield on the 10-year Treasury note is still well above the 4.29% level late Thursday before the debate.
In commodity markets, benchmark U.S. crude oil prices edged lower after hitting their highest since April, driven mainly by hopes of stronger demand in the summer and the possibility of hurricane Beryl damaging oil production in the Gulf of Mexico. Hurricane Beryl is battering the Caribbean Sea.
Benchmark U.S. crude rose 35 cents to $83.16 a barrel in electronic trading on the New York Mercantile Exchange, while the international standard Brent crude added 40 cents to $86.64 a barrel.
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AP reporter Stan Cho contributed.
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