Record Run for US Stocks to Set Tone for Asia: Markets Wrap

A record-breaking rally on Wall Street may set the tone for Asian markets as traders focus on earnings, even as elevated oil prices threaten to keep interest rates and global bond yields higher for longer.

Futures for the S&P 500 and the Nasdaq 100 Index signaled further gains after the indexes closed at all-time highs. The milestones came ahead of the start of the US earnings season next week and were driven by gains in artificial intelligence-related shares, with Nvidia Corp.’s market value approaching $6 trillion.

That may support Asian chipmakers including Samsung Electronics Co., SK Hynix Inc. and Taiwan Semiconductor Manufacturing Co. Equity-index futures for Japan and Hong Kong pointed to modest gains, while those for South Korea and Taiwan edged lower. In a reprieve for Indonesia, FTSE Russell reaffirmed the country’s equities as an emerging market.

Elsewhere, Treasury 10-year yields fell from the highest since 2002 and a gauge of dollar strength ended lower on Tuesday.

US oil edged higher to trade near $90 a barrel in early Asian trading. Brent settled near $101 a barrel, after earlier dropping as much as 3.3% as traders weighed rising exports from the Middle East against increasing Iranian attacks on tankers in the Strait of Hormuz.

The outlook for Asian stocks remains upbeat, with MSCI’s Asia Pacific gauge hovering near a record as investors bet companies can weather the risks from rising interest rates and energy costs. Much of the optimism is centered on hundreds of billions of dollars in AI-related spending by tech giants, which is fueling demand for memory chips and other electronics components.

While bets on the path for global monetary policy and geopolitical developments have captured investors’ attention, a less discussed factor has been strong earnings expectations, noted Kyle Rodda at Capital.com.

Analysts expect a roughly 25% increase in third-quarter S&P 500 profits from a year earlier, according to data compiled by Bloomberg Intelligence.

“Recent economic growth data have been strong and S&P 500 earnings revision breadth has remained positive,” Goldman Sachs Group Inc. strategists led by Ben Snider wrote in a recent note. “We expect most companies will once again surpass consensus earnings estimates this quarter.”

As geopolitical fragmentation continues, most major economies are absorbing higher energy prices and tariffs better than expected, according to Tiffany Wilding and Andrew Balls at Pacific Investment Management Co.

“A booming AI investment cycle, the ability of consumers and China to absorb higher costs, and an incremental approach by central banks may help support growth while containing inflation,” they added.

Corporate Highlights:

Apple Inc.’s upcoming push into smart home devices will include a doorbell, thermostat and other accessories developed through an unusual partnership with LG Electronics Inc.Anthropic PBC’s Mythos artificial-intelligence model has dramatically increased global cybersecurity risks, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said.Paramount Skydance Corp. closed its $110 billion acquisition of Warner Bros. Discovery Inc., completing one of the biggest media mergers of all time after engaging in a bruising battle for control with Netflix Inc. and fending off antitrust lawsuits.Anthropic PBC is expanding access to its most advanced AI models, allowing a select group of organizations to test the startup’s cutting-edge cyber capabilities in collaboration with the US government.Jio Platforms Ltd. is likely to seek a valuation of about 11 trillion rupees ($114 billion) in its planned initial public offering, according to people familiar with the matter, falling short of earlier expectations for what may still be the country’s largest-ever listing.

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Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.1% as of 7:05 a.m. Tokyo timeHang Seng futures were little changedS&P/ASX 200 futures were little changed

Currencies

The Bloomberg Dollar Spot Index fell 0.2%The euro was little changed at $1.1261The Japanese yen was little changed at 158.12 per dollarThe offshore yuan was little changed at 6.7017 per dollar

Cryptocurrencies

Bitcoin was little changed at $85,630.32Ether was little changed at $2,699.83

Bonds

Australia’s 10-year yield declined three basis points to 5.37%

Commodities

West Texas Intermediate crude rose 0.4% to $89.80 a barrelSpot gold was little changed

This story was produced with the assistance of Bloomberg Automation.