Asian stocks rise, exchanges in China are closed for the national holiday
Asian stocks rose on Friday amid mixed signs for investors, such as rising energy prices and the easing of COVID-19 restrictions in China.
Trade was closed in China for the Dragon Boat Festival, a national holiday. Benchmarks in the rest of the region rose slightly, encouraged by an overnight rally on Wall Street.
Market participants are closely watching non-farm payrolls data in the US later today, as well as a slew of economic data out of Japan next week. The OPEC meeting, in which oil-producing countries decided to increase part of their production, failed to stabilize energy prices significantly.
“To say that the outcome of the OPEC meeting disappointed expectations would be an understatement,” said Stephen Innes, managing partner at SPI Asset Management.
Japan and the United States have signed a revised “beef safeguard” mechanism under the U.S.-Japan trade deal that will help U.S. beef producers meet growing demand from the Japan made of high quality beef. The deal will reduce the chances of Japan’s safeguard duties being imposed on U.S. beef, the two sides said. It happened in early 2021.
“Together, the United States and Japan demonstrate their commitment to working together on shared priorities to achieve concrete and economically meaningful results for our people,” said U.S. Trade Representative Katherine Tai.
Japan’s benchmark Nikkei 225 jumped 1.1% in morning trade to 27,712.43. Australia’s S&P/ASX 200 gained 0.7% to 7,226.70, while South Korea’s Kospi gained 0.4% to 2,668.95.
Wall Street stocks overcame a shaky start to close broadly higher on Thursday, as major indexes more than offset losses at the start of the holiday-shortened week.
The S&P 500 rose 1.8% to 4,176.82, with more than 85% of stocks in the benchmark index posting gains. The Dow Jones Industrial Average rose 1.3% to 33,248.28, while the Nasdaq climbed 2.7% to 12,316.90.
Tech stocks, whose high values tend to give the broader market a bigger push up or down, were a big part of Thursday’s rally. Chipmaker Nvidia jumped 6.9% and software maker Adobe rose 5.5%.
Communications stocks, companies dependent on direct consumer spending and some large industrial companies gained ground. Facebook parent company Meta Platforms rose 5.4%, Expedia Group added 6.3% and Boeing climbed 7.5%.
Small business stocks rose, signaling confidence in economic growth. The Russell 2000 gained 2.3%, to 1,897.67.
Trading has been choppy in recent days as investors remain concerned about inflation and the interest rate hikes the Federal Reserve is using to fight it. Thursday’s market rally may have been spurred, in part, by a report showing that private sector hiring was well below economists’ forecasts.
“The private payroll report was quite weak,” said Tom Hainlin, national investment strategist at US Bank Wealth Management. “This may be one of those environments where people are looking for weak data that gives them hope that the Fed will take a break in September.”
Rising energy prices have fueled inflation, which is already at its highest level in four decades. U.S. gasoline prices hit a new record high on Thursday, with the average price at the pump costing $4.71 a gallon, according to the AAA Auto Club Federation.
Investors remain focused on the balance between inflation, rising interest rates and economic growth. Several economic reports released on Wednesday reinforced expectations that the Fed would continue to aggressively raise interest rates. Wall Street fears the Fed is slowing economic growth too much and potentially sending the economy into recession.
But on Thursday, payroll processor ADP reported that hiring by U.S. private companies rose by just 128,000 in May. That’s well below the 302,000 economists expected, according to FactSet.
Wall Street will get another glimpse into the health of the broader US economy on Friday when the Labor Department releases its jobs report for May. The labor market was initially slow to recover from the impact of the virus pandemic, but rebounded strongly with low unemployment and ample job vacancies.
Meanwhile, high inflation is eating away at corporate profits, while the war in Ukraine and COVID-19 restrictions in China have also weighed on markets.
Bond yields have been relatively stable. The 10-year Treasury yield, which helps set interest rates on mortgages and other loans, fell to 2.91% from 2.93% late Wednesday.
In energy trading, benchmark U.S. crude fell 23 cents to $116.64 a barrel. Brent crude, the international standard, fell 12 cents to $117.49 a barrel.
In currency trading, the US dollar fell slightly to 129.82 Japanese yen from 129.87 yen. The Euro traded at $1.0765, down from $1.0752.
AP Business Writers Damian J. Troise and Alex Veiga contributed.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama