The prospect of a looser monetary policy helped lift Wall Street to new record highs on Wednesday
The Asian stock market witnessed notable increases on Thursday, led by a rally in tech stocks following a partnership between Samsung and Hynix to supply OpenAI data centers. Gold prices remained near their record high despite an uptick in the U.S. dollar, supported by a weak U.S. labor report that fueled expectations of additional Federal Reserve rate cuts.
The U.S. government shutdown has made it almost certain that key monthly payroll data will not be released on Friday. Meanwhile, the private ADP employment report showed the U.S. economy unexpectedly lost jobs in September, with the previous month’s figure also revised downward.
Even in the absence of official labor data, the weak ADP report led traders to treat 25-basis-point Fed rate cuts at each of the year’s remaining policy meetings as virtually certain.
Wall Street posts new record highs as Asian share surge
The prospect of a looser monetary policy helped lift Wall Street to new record highs on Wednesday, with the Philadelphia Semiconductor Index climbing over 2 percent. The S&P 500 climbed 0.34 percent, the Dow Jones Industrial Average edged up 0.093 percent, and the Nasdaq Composite rose 0.42 percent.
Despite the rally in Asian and American stocks, the MSCI All-World index fell 2.61 percent.
Chip stocks also drove gains in the Asian stock market, with Japan’s Nikkei up 1.19 percent as of 5:20 GMT. Taiwan’s tech-focused Taiwan Weighted Index rose 1.65 percent, while South Korea’s KOSPI surged 2.74 percent after chip giants Samsung and Hynix announced partnerships to supply OpenAI data centers. Hong Kong’s Hang Seng also surged 1.60 percent.
In the European stock market, the STOXX Europe 600 index gained 1.15 percent, while Germany’s DAX gained 0.98 percent.
Read: Dubai 24-carat gold prices dip to AED465.75 as global rates hover near all-time high
U.S. government shutdown raises safe-haven assets’ appeal
The government shut down much of its operations on Wednesday after deep partisan divisions blocked Congress and the White House from agreeing on funding, triggering what could become a prolonged standoff. The mix of expectations for Fed easing and concerns over the shutdown drove gold to a new all-time high of $3,895.09 overnight, while bolstering U.S. Treasuries and pushing yields sharply lower.
The U.S. dollar index, which measures the currency against six major peers, hovered near a one-week low of 97.459 reached overnight, last standing at 97.76.
The dollar was largely unchanged at 147.01 yen after a 1.8 percent drop over three days. Meanwhile, the euro edged up to $1.1738, and sterling rose to $1.34835.
Oil prices inched higher on expectations of tighter sanctions on Russian crude, aiming to end a three-day slide from 16-week lows. Brent crude futures rose 0.2 percent to $65.50 a barrel, while U.S. West Texas Intermediate (WTI) crude also climbed 0.2 percent to $61.92 a barrel.
AloJapan.com