Asian markets mostly up as Wall Street finally recovers

A person looks at an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo in the rain May 29, 2023. Asian shares were mostly up Friday, led by a jump on the Tokyo Stock Exchange, where share prices got a boost of optimism from a new bull market on Wall Street.

Japan's benchmark Nikkei 225 surged 1.8% to 32,224. Australia's S&P ASX 200 gained 0.4% to 7,126. South Korea's Kospi rose 1.1% to 2,638, bringing the total to 2,638. The Hang Seng in Hong Kong was up 0.8% at 19,453. The Shanghai Composite Composite rose 0.4% to 3,225 on the Nasdaq Stock Market. The S&P 500 rose 0.6% to hold it 20% above the top it hit in October. This means Wall Street's main measure of health has come out of a painful bear market, which saw it drop 25.4% in nearly nine months.

The rise of a bull market does not mean the stock market has made it back to its previous heights. A 25 percent drop for the S&P 500 requires a rally of 33% just to get back to even.

In trading on Thursday, the S&P 500 rose 26.41 to 4,293. The Dow Jones gained 0.5% to 33,833. Those shares rose 1% to 13,238, and Nasdaq rose 1%. Although it may seem arbitrary, the end of a bear market is a useful indicator for investors, as it offers a useful marker for determining the direction of a market. It also provides a reminder that investors who can hold on through downturns nearly always eventually have made back all their losses in S&P 500 index funds.

Even though it was driven by so many extremes - the worst inflation in generations and the fastest hikes to interest rates in decades, for example - this most recent bear market lasted only about nine months. It stretched from Jan. 4, 2022, when the S&P 500 set a record, until Oct. 12 when it hit bottom. It s shorter than the typical bear market and also resulted in a shallower loss than the average, according to data from the S&P Dow Jones IndicesDow Jones Indices.

Last year was more painful for investors as both stocks and bonds lost money, something that hasn t happened in decades.

Although the economy has refused to fall into recession despite repeated predictions for one, a substantial portion of this bull market has experienced a surge. It had been at the highest interest rates since 2007, three major collapses of US banks since March, a threat by the U.S. government of an economy-shaking default on its debt and a number of other problems.

The economy has been able to avoid a recession thanks to a consistently robust job market and spending by consumers. Hopes are rising that the Fed will soon stop hiking interest rates.

The broad expectations of traders are that the Fed will hold rates steady next week, which would mark the first meeting where it hasn t raised rates in more than a year. Although it may hike rates one more time in July, the hope on Wall Street is that it won t go beyond that. Inflation is decreasing from its peak last summer.

The highest number of workers applied for unemployment benefits in the past week since October 2021, according to a report from the Department of Labor.

After the unemployment numbers hit the market, the Treasuries gave up gains earlier in the morning. The 10 year Treasury yield fell to 3.71%, down from 3.78% late Wednesday. The two-year yield, based on predictions of the Fed, fell to 4.53% from 4.55%.

In energy trading, benchmark U.S. crude dropped 53 cents to $70.76 a barrel in electronic trading at the New York Mercantile Exchange. Its value was down $1.24 to $71.29 a barrel on Thursday. The dollar edged up to 139.36 Japanese yen from 138.90 yen in currency trading. The value of the euro was unchanged at $1.0783.