Current:Home > reviewsStock market today: Asian shares surge on hopes the Federal Reserve’s rate hikes are done -Wealth Nexus Pro
Stock market today: Asian shares surge on hopes the Federal Reserve’s rate hikes are done
View
Date:2025-04-19 14:21:16
TOKYO (AP) — Asian shares were mostly higher Thursday after the U.S. Federal Reserve indicated it may not need to pump the brakes any harder on Wall Street and the economy.
Japan’s benchmark Nikkei 225 gained 1.1% in afternoon trading to 31,950.61. Australia’s S&P/ASX 200 jumped 0.9% to 6,899.70. South Korea’s Kospi surged 1.8% to 2,341.96.
Hong Kong’s Hang Seng added 0.9% to 17,246.87, while the Shanghai Composite edged 0.3% lower to 3,015.33.
“It’s no surprise that Asian markets are responding positively to the gains in U.S. stocks and bonds after the Federal Reserve suggested its policy tightening cycle may be reaching the end of the runway. So maybe it is time to start engineering that elusive soft landing officially,” Stephen Innes, managing partner at SPI Asset Management, said in a commentary.
In Japan, Prime Minister Fumio Kishida announced an economic stimulus package worth about $113 billion that is meant to cushion the blow to household budgets from rising inflation and timed to counter weakening public support for his government. The package includes tax breaks for individuals and companies and subsidies to reduce rising energy costs.
Stocks climbed as Treasury yields eased in the bond market after the Fed announced its decision to hold interest rates steady, as expected. The Fed has already yanked the overnight rate from nearly zero early last year to its highest level since 2001, above 5.25%.
Longer-term Treasury yields have in turn been rising rapidly, with the 10-year Treasury yield topping 5% last month to reach its highest level since 2007.
The 10-year yield was at 4.72% early Thursday, down from 4.92% late Tuesday.
Fed Chair Jerome Powell said the central bank is unsure that its main interest rate is high enough to ensure high inflation will move down to its 2% target. That kept alive the possibility of more hikes by the Fed. He also said the Fed is not considering cuts to interest rates, which can act like steroids for financial markets.
But Powell acknowledged that a recent run higher in longer-term Treasury yields, and the tumble in stock prices that helped cause, are working on their own to slow the economy and could be starving high inflation of its fuel. If they can do that persistently, he indicated they could help the Fed whip inflation without requiring more rate hikes.
The jump in yields has already brought the average 30-year fixed mortgage rate to nearly 8%, for example, “and those higher costs are going to weigh on economic activity to the extent this tightening persists.”
The Fed has time to assess the full effects of its past rate hikes, he said.
“It takes time, we know that, and you can’t rush it,” Powell said.
All together, Powell’s comments were “dovish enough” for financial markets, according to Yung-Yu Ma, chief investment officer for BMO Wealth Management. “Dovish” is what Wall Street calls an inclination to keep interest rates easier, and Ma expects the Fed won’t hike rates any more.
On Wall Street, the S&P 500 rose 1.1% to 4,237.86 and the Dow Jones Industrial Average gained 0.7% to 33,274.58. The Nasdaq composite jumped 1.6% to 13,061.47.
High yields knock down prices for stocks and other investments while making borrowing more expensive for nearly everyone. That slows the economy and puts pressure on the entire financial system.
U.S. employers were advertising slightly more job openings at the end of September than economists expected, a report said Wednesday. The Fed has been hoping for softening there, which could take pressure off inflation without requiring many layoffs.
Big Tech stocks were winners Wednesday, along with other high-growth stocks typically seen as the biggest beneficiaries of easier interest rates.
Chipmaker Advanced Micro Devices rose 9.7% after it reported stronger profit and revenue for the latest quarter than forecast.
In other trading Thursday, benchmark U.S. crude added 78 cents to $81.22 a barrel. Brent crude, the international standard, gained 76 cents to $85.39 a barrel.
The U.S. dollar edged down to 150.45 Japanese yen from 150.96 yen. The euro cost $1.0600, up from $1.0570.
veryGood! (3881)
Related
- Paige Bueckers vs. Hannah Hidalgo highlights women's basketball games to watch
- 'Bee invasion' suspends Carlos Alcaraz vs. Alexander Zverev match at BNP Paribas Open
- Gypsy Rose Blanchard Shares Why She Deleted Her Social Media Accounts
- Odell Beckham Jr. landing spots: Bills and other teams that could use former Ravens WR
- At site of suspected mass killings, Syrians recall horrors, hope for answers
- Russell Wilson Is the MVP After Helping Ciara With Her Breastmilk
- Michael Jackson’s Son Bigi “Blanket” Jackson’s Rare Outing Will Make You Feel Old
- Alec Baldwin Files Motion to Dismiss Involuntary Manslaughter Charges in Rust Shooting Case
- As Trump Enters Office, a Ripe Oil and Gas Target Appears: An Alabama National Forest
- 'My sweet little baby': Georgia toddler fatally shot while watching TV; police search for suspects
Ranking
- IRS recovers $4.7 billion in back taxes and braces for cuts with Trump and GOP in power
- Home sellers are cutting list prices as spring buying season starts with higher mortgage rates
- Toronto Raptors guard RJ Barrett mourning death of his younger brother, Nathan Barrett
- Ayesha Curry says being the godmother of Lindsay Lohan's son 'makes me want to cry'
- Newly elected West Virginia lawmaker arrested and accused of making terroristic threats
- Baywatch’s Nicole Eggert Shaves Her Head Amid Breast Cancer Diagnosis
- Brittany Cartwright Reveals How Getting Facial Liposuction Negatively Affected Her Appearance
- Your ACA plan's advance premium tax credit may affect your refund or how much you owe.
Recommendation
New Mexico governor seeks funding to recycle fracking water, expand preschool, treat mental health
Wisconsin Republican Senate candidate Hovde promises to donate salary to charity
Pioneer Woman Ree Drummond Denies Using Ozempic Amid Weight Loss Transformation
Starbucks faces lawsuit for tacking on charge for nondairy milk in drinks
Working Well: When holidays present rude customers, taking breaks and the high road preserve peace
Prince William and Prince Harry Honor Late Mom Princess Diana With Separate Appearances
James Crumbley, father of Oxford High School shooter, found guilty of involuntary manslaughter
Jimmie Allen and former manager agree to drop lawsuits following sexual assault claim