Asian Stock Rally Falters Ahead of US PCE Data: Markets Wrap
(Bloomberg) — Asian equities fell following a lackluster session on Wall Street that weighed on tech stocks and bonds, with investors keenly awaiting the release of key US inflation data later on Friday.
MSCI Inc.’s gauge of Asian shares dropped as much as 0.7%, but was still on track for a second straight weekly gain. Japanese indexes led losses in the region after a strong rally in the previous session. US futures edged higher. That’s after the S&P 500 climbed 0.1% on Thursday amid a rise in Treasury yields.
The yen strengthened against the dollar and Japanese bond futures edged lower after people familiar with the matter said Bank of Japan officials are ready to raise rates at their policy meeting later this month, provided there’s no major shock to the economy or financial markets in the meantime. India’s central bank cut its benchmark rate as expected.
Federal Reserve officials will get a dated reading on their preferred inflation gauge, the personal consumption expenditures price index, on Friday. The September income and spending report — also delayed because of a government shutdown — is due to be released as well.
The decline in equities underscored risk sentiment remains fragile even as global stocks have rebounded in the past two weeks to be within 1% of a record closing high reached in late October. Those gains partly reflected easing concerns over tech valuations as well as growing confidence among traders that the Fed will deliver a 25-basis point interest-rate cut next week at its last meeting of the year.
“Participants are consciously reducing risk exposure before a key data window,” said Dilin Wu, a strategist at Pepperstone Group. “Even with high odds, PCE still has the power to shift the market’s timing and confidence in the path of rate cuts.”
Friday’s figures will include the PCE index and a core measure that excludes food and energy. Economists project a third-straight 0.2% increase in the core index. That would keep the year-over-year figure hovering a little below 3%, a sign that inflationary pressures are stable, yet sticky.
A measure of the dollar edged lower in Asia on Friday and was on course for its fourth weekly decline in five. Elsewhere, Bitcoin traded below $93,000, silver and gold rose. India’s 10-year bond yields fell and stocks extended gains after the policy decision.
Meanwhile, shares of Moore Threads Technology Co., a Chinese artificial intelligence chipmaker, surged more than 500% in its Shanghai trading debut after raising 8 billion yuan ($1.1 billion) in the year’s second-largest onshore initial public offering.
US Treasuries
US government bonds were sold off on Thursday as data showed signs of resilience in the jobs market. Applications for US unemployment benefits fell last week to the lowest in more than three years, indicating that employers are still largely holding onto workers despite a wave of recent layoffs.
Separate data from Challenger, Gray & Christmas showed announced layoffs at US companies fell last month after surging in October, but were still the highest for any November in three years. Even so, bets on a Fed reduction remained intact.
“There remain some negative payroll employment readings. But the US labor market is not collapsing based on timely data and reports that have leading indicator properties,” said Don Rissmiller at Strategas. “We continue to believe the Fed will cut the fed funds rate again by 25 basis points in December.”
Policymakers will not yet have the government’s November jobs report in hand for their meeting next week. The report, originally due Dec. 5, was delayed until Dec. 16 as a result of the record-long government shutdown. That release will also include October payrolls figures.
“We continue to expect two rate cuts by the end of the first quarter of 2026, with Friday’s personal consumption expenditure index likely to show price pressures under control,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management.
National Economic Council Director Kevin Hassett said the Fed should cut rates at its meeting next week and predicted a reduction of 25 basis points as speculation grows that President Donald Trump is readying his nomination to lead the central bank.
Corporate News
Meta Platforms Inc. shares jumped 3.4% after people familiar with the matter said executives are considering budget cuts for the metaverse group. Australian data center group NextDC Ltd. and ChatGPT-developer OpenAI agreed to partner on the development of a large-scale data center in Sydney. NextDC’s shares jumped. The cloud-computing startup Fluidstack is in talks to raise roughly $700 million in a funding round that would value the company at $7 billion, according to a person familiar with the situation. Nvidia Corp. would be barred from shipping advanced artificial intelligence chips to China under bipartisan legislation unveiled Thursday in a bid to codify existing US restrictions on exports of advanced semiconductors to the Chinese market. Jane Street Group’s record haul this year has been boosted by savvy bets on the artificial intelligence boom that are showing up as big gains in its trading results, according to people familiar with the matter. Fullerton Fund Management Co., controlled by Temasek Holdings Pte, is winding down its China private fund businesses including an eight-year-old hedge fund unit, according to people with knowledge of the matter. Mitsubishi UFJ Financial Group Inc. plans to team up with Morgan Stanley in asset management, deepening their 17-year partnership. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.2% as of 1:38 p.m. Tokyo time Japan’s Topix fell 1.1% Australia’s S&P/ASX 200 was little changed Hong Kong’s Hang Seng fell 0.2% The Shanghai Composite was little changed Euro Stoxx 50 futures rose 0.1% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1652 The Japanese yen was little changed at 154.99 per dollar The offshore yuan was little changed at 7.0691 per dollar Cryptocurrencies
Bitcoin fell 0.2% to $91,996.67 Ether rose 1.1% to $3,159.45 Bonds
The yield on 10-year Treasuries was little changed at 4.10% Australia’s 10-year yield was little changed at 4.69% Commodities
West Texas Intermediate crude fell 0.3% to $59.50 a barrel Spot gold rose 0.2% to $4,214.03 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson and Winnie Hsu.
©2025 Bloomberg L.P.
