On Tuesday, Asian shares showed a mixed but mostly positive trend as investors awaited key reports scheduled for later in the week, which were expected to have significant implications for the market. Japan’s benchmark Nikkei 225 index surged 1.0% to 38,300.49 in afternoon trading, rebounding from a national holiday. Similarly, Sydney’s S&P/ASX 200 rose by 0.2% to reach 7,655.60, while South Korea’s Kospi edged up 0.5% to 2,700.82. However, Hong Kong’s Hang Seng index slipped by 0.2% to 17,709.57, and the Shanghai Composite fell by 0.2% to 3,105.64.
Meanwhile, on Wall Street, major indices recorded gains, with the S&P 500 rising by 0.3% to close at 5,116.17, marking its best performance since November. The Dow Jones Industrial Average climbed 0.4% to 38,386.09, and the Nasdaq composite increased by 0.3% to 15,983.08. Investors were particularly focused on upcoming earnings reports from significant companies such as Amazon and Apple, which were anticipated to unveil their first-quarter profits. With approximately half of the S&P 500 companies having already reported, the majority surpassed analysts’ expectations.
Last week’s robust earnings reports contributed to the S&P 500’s positive performance, marking its first winning week in four. Companies within the index appear poised for a third consecutive quarter of earnings per share growth, according to FactSet data. However, April proved to be a volatile month for the stock market, with the S&P 500 experiencing a decline of up to 5.5% amid concerns surrounding persistent inflation.
Initially, traders had anticipated a significant number of interest rate cuts by the Federal Reserve throughout 2024, but expectations have since been revised downward to only one cut, as indicated by data from CME Group. The Federal Reserve was scheduled to announce its latest policy decision on Wednesday, with no changes expected to its main interest rate. However, market participants were keen to glean insights from Fed Chair Jerome Powell regarding the potential timing of future rate adjustments.
Investor attention was also directed towards a crucial report set to be released on Friday, providing further insights into the health of the U.S. job market. Economists predicted a slowdown in hiring by U.S. employers during April, coupled with relatively stable growth in workers’ wages. The overarching hope was that the job market would exhibit sufficient strength to support economic expansion without exacerbating inflationary pressures.
In the bond market, the yield on the 10-year Treasury note eased to 4.61% from 4.67% late Friday. Meanwhile, benchmark U.S. crude oil prices dipped to $82.37 a barrel, while Brent crude slipped to $88.24 a barrel in energy trading. Currency markets saw the U.S. dollar strengthening against the Japanese yen, rising to 156.72 yen from 156.28 yen, while the euro weakened slightly to $1.0704 from $1.0725. Overall, market participants remained vigilant, closely monitoring developments and reports for potential market-moving cues.