Asian Stocks Rise After US Inflation Backs Fed Cut: Markets Wrap

Asian stocks rose on Thursday following US inflation data that supported expectations of a Federal Reserve interest rate cut this month. The S&P 500 rose 0.8% and the Nasdaq 100 advanced 1.9% to a new high, with tech stocks leading the rally. Broadcom Inc. rose 6.6% following a report that the chipmaker was working on an AI deal with Apple Inc. (Source: Number 4)

The rally in Asian stocks came as investors digested the latest US inflation data, which showed a slower pace of price increases. The consumer price index (CPI) rose 0.1% in November, below expectations of a 0.2% increase. The core CPI, which excludes volatile food and energy prices, also rose 0.1%, in line with expectations. The data suggests that inflation may be peaking, which could lead the Fed to cut interest rates in December.

The Fed has been raising interest rates aggressively this year to combat inflation, which has reached its highest level in decades. However, the recent slowdown in inflation has raised hopes that the Fed may soon pivot to a more dovish stance. The Fed is expected to announce its decision on interest rates at its meeting next week.

The rally in Asian stocks was broad-based, with gains seen in most major markets. The Hang Seng Index in Hong Kong rose 1.2%, while the Shanghai Composite Index gained 0.8%. The Nikkei 225 in Japan rose 0.7%, while the Kospi in South Korea gained 1.1%. The ASX 200 in Australia rose 0.5%.

The rally in tech stocks was particularly notable, with the sector leading the gains in the US market. The Philadelphia Semiconductor Index rose 2.2%, while the iShares PHLX Semiconductor ETF (SOXX) gained 2.1%. The rally in tech stocks came as investors bet that the sector would benefit from a potential Fed rate cut.

The rally in Asian stocks also came as geopolitical tensions eased. China's military activities near Taiwan and the US's response to these actions have been a significant concern for Asian markets. However, the recent easing of tensions between the US and China has helped to boost investor sentiment.

The rally in Asian stocks also came as investors bet on a potential rebound in the global economy. The recent slowdown in inflation has raised hopes that the global economy may avoid a recession. The rally in Asian stocks also came as investors bet on a potential rebound in the global economy.

Overall, the rally in Asian stocks on Thursday was driven by a combination of factors, including the latest US inflation data, easing geopolitical tensions, and hopes for a rebound in the global economy. The rally in tech stocks was particularly notable, with the sector leading the gains in the US market. The rally in Asian stocks also came as investors bet on a potential rebound in the global economy.