Asian stocks started June with big gains Monday after a report showing U.S. inflation is not getting worse led to a rally on Wall Street.
Hong Kong’s Hang Seng led the region’s rise, jumping 2.7% to 18,560.98 and the Shanghai Composite Index rose 0.3% to 3,095.63.
Tokyo’s Nikkei 225 rose 0.9% to 38,849.65, while Seoul’s Kospi jumped 1.9% to 2,687.11.
Australia’s S&P/ASX 200 index rose 0.7 percent to 7,756.80.
In Taiwan, the Taiex is up 1.9%.
The S&P 500 index rose 0.8% on Friday to close its sixth winning month in the last seven, at 5,277.51. The Dow jumped 1.5% to 38,686.32 and the Nasdaq slipped less than 0.1% to 16,735.02.
Gap climbed to one of the biggest gains in the market, at 28.6%, after generating profit and revenue for the latest quarter that beat analysts’ expectations. The retailer also raised its sales and profitability forecasts this year, although it said the economic outlook remained uncertain.
Stocks overall benefited from falling Treasury yields in the bond market after the latest reading on inflation came in about as expected, at 2.7% last month.
That could boost the Federal Reserve’s confidence that inflation is moving sustainably toward its 2% target, something it says it needs before doing so. lowered its main interest rate.
The U.S. government report released Friday also showed that growth in consumer spending was weaker than economists expected. Americans’ income growth also slowed last month.
“Finally, U.S. economic data is starting to show clear signs that consumers are feeling the effects. With savings depleting, prices soaring, the job market cooling, disposable incomes falling and interest rates still high, spending in 2022 becomes impossible. It’s like trying to fill a bucket with holes: good luck keeping it full,” Stephen Innes of SPI Asset Management said in a commentary.
The Fed is keeping the federal funds rate at the highest level in more than 20 years in hopes of slowing the economy enough to quell high inflation. But if it keeps rates too high for too long, it could stifle growth in the economy and cause a recession that throws workers out of work and reduces corporate profits.
The 10-year Treasury yield fell to 4.50% on Friday from 4.55% late Thursday. It had risen above 4.60% earlier in the week on concerns about tepid demand following some Treasury auctions, a move that hurt stocks.
Virtually no one expects the Federal Reserve to cut interest rates at its next meeting in a week and a half, but most expect it to cut them at least once by end of the year, according to data from the CME group.
Dell fell 17.9% even though it matched analysts’ profit forecasts for the latest quarter. Its stock had already soared 122% in 2024 before the report was released, meaning expectations were sky high, and analysts highlighted concerns about how much Dell is making on every dollar of revenue.
Nvidia fell for a second straight day, losing 0.8%, as its momentum finally slows after climbing more than 20% since its launch. explosion profit report last week.
Trump Media and Technology Group fell 5.3% in its first trading session after the conviction of Donald Trump on criminal charges Thursday. The company, which runs the Truth Social platform, had warned earlier in filings with US securities regulators about the potential impact of a conviction.
MongoDB fell 23.9% despite higher earnings and revenue forecasts. The developer database company gave profit forecasts for the current quarter and this full year that missed analysts’ expectations.
In other trading Monday morning, U.S. benchmark crude oil gained 46 cents to $77.45 a barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, the international standard, rose 46 cents to $81.57 after OPEC agreed over the weekend to maintain its price-supporting production cuts.
The U.S. dollar slipped to 157.13 Japanese yen from 157.26 yen. The euro rose from $1.0848 to $1.855.
