Asian stocks continued to follow Wall Street’s ferocious rally, with Japan’s Nikkei stock average soaring above 42,000 points for the first time.
Asian shares rose on Thursday following a surge on Wall Street, while Japan’s Nikkei average surpassed 42,000 points for the first time.
Futures for the Dow Jones Industrial Average and the S&P 500 fell 0.1%.
The Nikkei stock average rose 0.9 percent to close at 42,224.02, again hitting a record high following record closing highs set on Tuesday and Wednesday.
Buying strengthened across a wide range of stocks, with electronics manufacturers leading the way. Sony Group rose 3.6%, precision machinery maker Disco rose 3.4%, and electronic parts maker Murata Manufacturing rose 2.8%.
Elsewhere in Asia, Hong Kong’s Hang Seng Index rose 2.1 percent to 17,831.40, while the Shanghai Composite Index added 1.1 percent to 2,970.39.
In Seoul, the KOSPI rose 0.8% to 2,891.35.
Australia’s S&P/ASX 200 rose 0.9% to 7,889.60. Taiwan’s Taiex rose 1.6% and Taiwan Semiconductor Manufacturing Co. added 3.4%.
TSMC’s U.S.-listed shares rose 3.5% on Wednesday after the company said its June revenue rose about 33% from a year earlier. The company makes chips for companies such as Nvidia, which has led the business world’s rapid move into artificial intelligence technology.
Hopes of big future gains from AI have propelled Nvidia in particular to extraordinary heights over the past year, with the stock up another 2.7% on Wednesday for a 172.5% gain so far this year. Nvidia was again the most powerful single driver lifting the S&P 500 as Wall Street extended its rally to a seventh day, led by big tech companies.
U.S. stocks hit a new record high on Wednesday, driven by gains in shares of big technology companies, whose shares have soared on the artificial intelligence (AI) frenzy.
Hopes of interest rate cuts also boosted the market.
The S&P 500 rose 1%, surpassing the 5,600 level for the first time, closing at 5,633.91.
The Nasdaq Composite rose 1.2%, to 18,647.45, and the Dow Jones Industrial Average rose 1.1%, to 39,721.36.
Advanced Micro Devices was another big driver of the stock market surge, with its shares rising 3.9% after it announced a deal to acquire European AI research lab Silo AI for $665 million.
Despite a slowing U.S. economy and severe pressures on low-income households, markets continue to set new records.
Expectations that inflation will slow enough to allow the Federal Reserve to deliver a much-needed interest rate cut later this year are also spurring buying.
Federal Reserve Chairman Jerome Powell returned to Capitol Hill to testify about interest rates, repeating many of his comments from the previous day. He said the central bank was “not sending any signal” about when interest rates would be cut, but noted the drawbacks of cutting rates too late.
“As we get more and better data, our confidence will increase,” paving the way for rate cuts, Powell said.
Many on Wall Street expect the Fed to start cutting its key interest rate in September, but traders have long had a tendency to get ahead of themselves. Chairman Powell acknowledged recent inflation improvements but reiterated that the Fed is not convinced inflation is sustainably moving toward its 2% target.
Later on Thursday, the U.S. government will release its latest monthly inflation numbers, and economists expect them to report that the prices American consumers paid for food, airfare and everything else rose 3.1% in June from a year earlier, slightly lower than May’s 3.3% inflation rate.
“With the Fed wanting to see ‘better data’, U.S. inflation figures will play a key role in testing whether markets are over-pricing a rate cut as early as September this year,” IG’s Yep Jun Rong said in a commentary.
Later this week also marks the unofficial start of the latest earnings reporting season, with Delta Air Lines, JPMorgan Chase and others set to announce how much profit they made in the April-June spring, and Wall Street hoping S&P 500 companies will post their first big gains in more than two years.
Meanwhile, benchmark U.S. crude rose 60 cents to $82.70 a barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, the international standard, rose 63 cents to $85.71 a barrel.
The U.S. dollar fell to 161.75 yen from 161.66 yen. The euro rose to 1.0837 dollars from 1.0832 dollars.
