BANGKOK – On Wednesday, shares climbed in Asia following a strong rally in the U.S. stock market to new highs after inflation data suggested slight improvements across the country last month.
Tokyo’s benchmark Nikkei 225 added to its record set a day earlier. Shares in Hong Kong, Singapore and Malaysia also gained more than 1%.
The recent rise in stock prices has been partially attributed to relief over an extended ceasefire in President Donald Trump’s trade conflict with China and continued anticipation of potential interest rate cuts by the Federal Reserve. These hopes were fueled by a slowdown in the consumer price index in July.
“Asia woke up in full risk-on mode, riding the coattails of a U.S. session that looked like someone hit the ‘infinite bid’ button after CPI didn’t blow the inflation doors off,” commented Stephen Innes of SPI Asset Management.
China and the U.S. have agreed to prolong the pause on significantly higher tariff rates by 90 days, allowing more time for discussions on a comprehensive trade deal. While it remains uncertain what the negotiations will achieve, the truce has alleviated some pressure on companies and countries throughout Asia heavily reliant on supply chains involving China.
Hong Kong’s Hang Seng surged 1.9% to 25,439.91, while the Shanghai Composite index added 0.6% to 3,686.34.
In Japan, the confirmation from the Trump administration that its exports will face a steady 15% U.S. import duty has led to robust buying of computer chip-related companies and other exporters.
The Nikkei 225 gained 1.6% to 43,407.46.
Elsewhere in Asia, South Korea’s Kospi advanced 0.8% to 3,215.43. In Australia, the S&P/ASX 200 shed 0.5% to 8,840.30.
Taiwan’s Taiex was up 0.8% and the Sensex in India gained 0.4%. In Bangkok, the SET climbed 0.9%.
On Tuesday, the S&P 500 rose 1.1% to top its all-time high set two weeks ago. It closed at 6,445.76.
The Dow Jones Industrial Average climbed 1.1% to 44,458.61, while the Nasdaq composite jumped 1.4% to set its own record of 21,681.90.
Intel’s stock rose 5.6% after Trump said its CEO has an “amazing story,” less than a week after he had demanded Lip-Bu Tan’s resignation.
Circle Internet Group, responsible for the widely used USDC cryptocurrency that tracks the U.S. dollar, rose 1.3% despite posting a larger loss for the latest quarter than analysts had predicted. It reported a 53% increase in total revenue and reserve income in its first quarter as a publicly traded company, exceeding expectations.
The better-than-expected report on inflation raised hopes the Federal Reserve will have the leeway to cut interest rates at its next meeting in September.
Tuesday’s report said U.S. consumers paid prices for groceries, gasoline and other costs of living that were overall 2.7% higher in July than a year earlier. That’s the same inflation rate as June’s, and it was below the 2.8% that economists expected.
Lower rates would give a boost to investment prices and to the economy by making it cheaper for U.S. households and businesses to borrow to buy houses, cars or equipment. President Donald Trump has angrily been calling for cuts to help the economy, often insulting the Fed’s chair personally while doing so.
The Fed has hesitated, worried that Trump’s tariffs could make inflation much worse.
The Fed will get one more report on inflation and another on the U.S. job market, before its next meeting, which ends Sept. 17. The most recent jobs report was a stunner, coming in much weaker than economists expected.
Critics say the broad U.S. stock market is looking expensive after its surge from a bottom in April. That’s putting pressure on companies to deliver continued growth in profit.
In other dealings early Wednesday, U.S. benchmark crude oil edged 4 cents higher to $63.21 per barrel. Brent crude, the international standard, was up 8 cents at $66.20 per barrel.
The U.S. dollar rose to 147.94 Japanese yen from 147.84 yen. The euro climbed to $1.1686 from $1.1677.
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AP Business writers Stan Choe and Matt Ott contributed.
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