After the best two-day run for US equity in more than two years, Asian stocks extended a rally on Wednesday as investors began to anticipate a slowing of central bank tightening that could jolt risk assets higher.
Australian, Japanese and South Korean shares traded higher on Tuesday, as improving risk sentiment drags global equities from oversold levels. The S&P 500 went up by 3.1% and European stocks rose by the biggest margin since March. Elon Musk revived his $44 billion bid for Twitter Inc., which soared 22%.
A decline in US job openings provided evidence that the labor market may be cooling, indicating that the Federal Reserve may slow its rate-hiking path. A Fed official said the Fed still had more to do in tightening monetary policy to combat inflation, but it did not appear that the central bank would follow the Reserve Bank of Australia, which increased rates less than anticipated on Tuesday.
In a note from Ed Yardeni, president of his research firm, said last week's pivot by the Bank of England convinced investors that the Fed must give more weight to financial stability, which means that the current monetary tightening cycle might end sooner rather than later.
A Bloomberg index of the dollar was steady after falling 3% from a peak last week. The pound was lower after climbing to the highest level in two weeks on Tuesday. The price of oil traded flat after jumping on Tuesday, as the OPEC said it was considering an output cut of as much as 2 million barrels a day, double prior estimates.
Investors will be keen on Friday's US jobs data that economists expect to show a slowing in new jobs added.
The jobs data will have to be in line with, or short of expectations for the market to continue higher, said Lindsey Bell, chief markets and money strategist at Ally. The market is anticipating a goldilocks labor-market report that is not too hot and not too cold. Will earnings disappoint and push equities to new lows? This week MLIV Pulse asked about corporate earnings. It is brief and we don't collect your name or any contact information. Some of the main moves in markets: None Maine Lobster Union Points the Way for Organizing Gig Economy Workers