Stock Rally Powers On as Asian Shares Hit Record: Markets Wrap
(Bloomberg) — A rally in global stocks extended, with Asian shares trading above their record close as easing trade tensions and optimism about interest-rate cuts bolstered sentiment.
MSCI’s regional stock gauge topped its record close, with Chinese equities extending gains on anticipation of a trade pact with the US. An all-country index was also poised for a new peak. Japanese shares pared gains as the pro-stimulus Sanae Takaichi won a key vote to become the nation’s prime minister.
Shares of rare-earths companies jumped after a US-Australia deal while gold held near its record highs. Asian markets are finding fresh momentum after the S&P 500 logged its biggest two-day gain since June on Monday, with about 85% of companies beating profit estimates so far. Strong earnings are providing more legs to a tech-powered rally, as investors speculate the Federal Reserve will cut rates later this month just as trade tensions between the US and China recede.
“Investors have a lot to feel comfortable about, given the backdrop of falling rates and structural AI demand growth,” said Vey-Sern Ling, managing director at Union Bancaire Privee. “Barring a sharp slowdown in the US economy, another episode of US-China tensions, or irrefutable evidence that AI is just hype, the markets could be well-supported into year end.”
While trade tensions continued to drive investor emotion and volatility, drawdowns have been short lived, as retail investors see them as opportunities to add risk to their portfolios. Global stocks have rallied to new highs since their April slump as traders bet the billions spent by companies on artificial intelligence will yield profits in the future.
Adding to the mood is the progress in US-China trade talks. While President Donald Trump reiterated his threat to follow through on a tariff hike on Chinese goods “if there isn’t a deal” by Nov. 1, he said he plans to meet with President Xi Jinping next week.
“Currently the market is not overly worried about decoupling or massive escalation,” said Winnie Wu, head of APAC equity strategy at Bank of America Securities. Investors should stay risk-on until the end of October for China’s Fourth Plenum and the Trump-Xi meeting, she said.
On inflation data, after a delay caused by the US government shutdown, the Bureau of Labor Statistics is set to release September’s consumer price index on Friday. The data, originally slated for Oct. 15, will give Federal Reserve officials a key reading on inflation ahead of their Oct. 30 policy meeting.
The data may take on greater importance due to the government shutdown-driven data drought, said Rick Gardner at RGA Investments. He still sees a Fed cut in October and noted that a key test will be Big Tech earnings, with investors looking for clarity on how spending on artificial intelligence is leading to profitability.
Netflix Inc. and Tesla Inc. are set to report this week, along with the likes of General Motors Co., International Business Machines Corp. and AT&T Inc.
The Treasury 10-year yield traded below 4% as falling oil prices eased concern about inflation before Friday’s consumer-price data announcement. Brent crude oil hovered close to $60 a barrel, heading for the lowest close since May.
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 2:01 p.m. Tokyo time Japan’s Topix rose 0.1% Australia’s S&P/ASX 200 rose 0.7% Hong Kong’s Hang Seng rose 1.6% The Shanghai Composite rose 1.1% Euro Stoxx 50 futures rose 0.1% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1635 The Japanese yen fell 0.3% to 151.14 per dollar The offshore yuan was little changed at 7.1191 per dollar Cryptocurrencies
Bitcoin fell 2.8% to $107,979.39 Ether fell 3.6% to $3,858.1 Bonds
The yield on 10-year Treasuries was little changed at 3.98% Japan’s 10-year yield declined one basis point to 1.660% Australia’s 10-year yield declined three basis points to 4.12% Commodities
West Texas Intermediate crude fell 0.2% to $57.38 a barrel Spot gold fell 0.3% to $4,341.92 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Toby Alder.
©2025 Bloomberg L.P.
