Asian Markets Rise as Big Tech Offsets Oil Slump
Asian markets mostly rose on Tuesday, following a positive close on Wall Street. Gains in Big Tech companies helped offset losses in the oil-and-gas sector.
Japan's Nikkei 225 index climbed 0.5%, while Australia's S&P/ASX 200 gained 0.6%. South Korea's Kospi, however, dipped 0.2%. Hong Kong's Hang Seng edged up 0.4%, while the Shanghai Composite slipped 0.4%.
The positive sentiment in Asia followed a strong performance on Wall Street, where the S&P 500 rose 0.3%. The Dow Jones Industrial Average gained 0.6%, and the Nasdaq composite finished 0.3% higher.
Several Big Tech stocks, including Apple and Meta Platforms, helped lead the way. These high-flying stocks have been at the forefront of Wall Street for years and have grown so big that their movements can singlehandedly shift the S&P 500.
However, stocks in the oil-and-gas industry dropped, hurt by the sinking price of oil. Exxon Mobil fell 0.5% and ConocoPhillips fell 1.2%.
The decline in oil prices followed an attack by Israel on Iranian military targets on Saturday. The attack was in retaliation for an earlier barrage of ballistic missiles. While the attack was more restrained than some investors had feared, it raised concerns about a potential escalation of the conflict in the Middle East.
Financial markets are also dealing with the volatility that typically surrounds a U.S. presidential election, with Election Day just one week away. Markets have historically been shaky heading into an election, only to calm afterward regardless of which party wins.
The trend affects both the stock and the bond markets. In the bond market, Treasury yields were ticking higher to tack more gains onto their sharp rise for the month so far.
The yield on the 10-year Treasury rose to 4.28% from 4.24% late Friday. That's well above the roughly 3.70% level where it was near the start of October.
Yields have climbed as report after report has shown the U.S. economy remains stronger than expected. That's good news for Wall Street, because it bolsters hopes the economy can escape from the worst inflation in generations without the painful recession that many had worried was inevitable.
But it's also forcing traders to ratchet back forecasts for how deeply the Federal Reserve will cut interest rates, now that it's just as focused on keeping the economy humming as getting inflation lower. With bets diminishing on how much the Fed will ultimately cut rates, Treasury yields have also been given back some of their earlier declines.
That means the U.S. jobs report on the schedule for Friday could end up being the market's main event, even bigger than the Big Tech profit reports. Investors want to see more evidence of solid hiring to keep alive the perfect-landing hopes for the economy.