Asian Markets Set for Higher Open Amid Wall Street Gains and Fed Cut Hopes

Asia markets are expected to open higher, tracking Wall Street gains amid hopes of a Federal Reserve interest rate cut. Japan's Nikkei 225 futures are up, while Hong Kong's Hang Seng index futures point to a higher open. However, Australia's S&P/ASX 200 futures are set to start lower. The S&P 500 rose 0.8% to hit a new intraday high, surpassing its prior high from July 31.

July 2, 2025 — Wall Street markets rallied on Tuesday, with the S&P 500, Dow Jones, and Nasdaq composite all setting new records. The rally was fueled by better-than-expected inflation data, which suggested that the Federal Reserve may have room to cut interest rates in September [1]. The S&P 500 rose 1.1% to top its all-time high, the Dow Jones Industrial Average climbed 1.1%, and the Nasdaq composite jumped 1.4% to set its own record.

The improved inflation report indicated that consumer prices were 2.7% higher in July compared to the same period last year, which was below the 2.8% that economists had anticipated. This development pushed traders to increase their bets that the Fed would cut interest rates, with a 94% chance now expected [1].

The better-than-expected inflation report also had some discouraging undertones. An underlying measure of inflation hit its highest point since early this year, noted Gary Schlossberg, market strategist at Wells Fargo Investment Institute. This has caused some up-and-down swings for Treasury yields in the bond market [1].

Intel’s stock rose 5.6% after President Trump praised its CEO, while Circle Internet Group, the company behind the popular USDC cryptocurrency, climbed 1.3% despite reporting a larger loss than expected [1]. On the losing side, Celanese sank 13.1% despite reporting a better profit than expected, and Cardinal Health dropped 7.2% despite a stronger profit than expected [1].

Asian markets are expected to open higher, tracking Wall Street gains amid hopes of a Federal Reserve interest rate cut. Japan's Nikkei 225 futures are up, while Hong Kong's Hang Seng index futures point to a higher open. However, Australia's S&P/ASX 200 futures are set to start lower [2]. The S&P 500 rose 0.8% to hit a new intraday high, surpassing its prior high from July 31.

The global economic outlook remains fluid, with OPEC anticipating healthy global growth well into 2025, driven by stronger trade and resilient consumer demand. However, ongoing trade talks between the US and major players like India, Brazil, and Canada underscore the uncertainty in the global outlook [2].

The countdown to a potential rate cut shapes investor strategy, with Treasury yields capturing the mood. The 10-year ticked up to 4.3%, while the 2-year slipped to 3.73% [2]. The mixed bag for the S&P 500 saw On Holding jump 6.9% on upbeat results, while Cardinal Health dropped 7.3% despite a solid forecast and a $1.9 billion acquisition [2].

The Federal Reserve is in a tough spot: it needs to wait for more progress on inflation but must also consider shaky job or growth figures. Global investors and central banks will be glued to every data release for clues [2].

References:
[1] https://spectrumlocalnews.com/me/maine/business/2025/08/12/wall-street-august-12
[2] https://finimize.com/content/wall-street-bets-grow-on-a-fed-rate-cut-this-fall