
Asian Markets Rise Following Wall Street Rally
Asian shares mostly rose on Thursday, following a strong rally on Wall Street driven by encouraging news on U.S. inflation. The Bank of Japan reported that wholesale prices in Japan rose 3.8% in December 2024 compared to the previous year, adding pressure on the central bank to raise interest rates, possibly at their upcoming monetary policy meeting next week.
In China, the Hang Seng index in Hong Kong gained 0.4%, while the Shanghai Composite index lost 0.2%.
On Wall Street, strong profit reports from Wells Fargo and other major U.S. banks contributed to the best day for indexes in two months. The S&P 500 jumped 1.8%, the Dow Jones Industrial Average rallied 1.7%, and the Nasdaq composite leaped 2.5%.
Bank stocks led the way after several reported stronger profits for the last three months of 2024 than analysts expected. Wells Fargo jumped 6.7%, Citigroup rallied 6.5%, and Goldman Sachs gained 6%.
Treasury yields eased following an update on U.S. inflation. The report showed that overall inflation accelerated to 2.9% from 2.7% in November. However, underlying inflation trends slowed to 3.2% in December, which was more encouraging news.
The Federal Reserve pays close attention to this underlying number, and it is particularly welcome following concerns that improvements in inflation have stalled. Wall Street has been volatile in recent weeks as traders adjust their forecasts for the Fed's interest rate actions in 2025.
While Wednesday's data is unlikely to convince the Fed to cut its main interest rate at its meeting later this month, it could open the door for cuts later in the year, possibly even in March, if more data shows that upward pressure on inflation is abating.
In other markets, U.S. crude oil added 15 cents to $78.86 a barrel, while Brent crude, the international standard, jumped 15 cents to $82.18 a barrel. The U.S. dollar declined to 156.06 Japanese yen from 156.47 yen, and the euro cost $1.0285, down from $1.0289.