TOKYO – Asian stocks rose on Friday as investors awaited a key inflation report that could influence the Federal Reserve’s next move on interest rates.
Japan’s benchmark Nikkei 225 index rose 0.4% to 39,583.08. S of Australia&OP/ASX 200 rose 0.1% to 7,768.00. South Korea’s Kospi rose 0.1% to 2,787.51. Hong Kong’s Hang Seng added 0.3% to 17,767.93, while the Shanghai Composite rose 0.9% to 2,971.18.
In Japan, the government reported that industrial production was stronger than expected in May, at 2.8%, and the unemployment rate remained unchanged from the previous month, at 2.6%.
On Thursday, S.&P500 saw a gain of 0.1%. The benchmark index has been hovering near the all-time high reached last week.
The Nasdaq index rose 0.3% and remains just below its all-time high. The Dow Jones Industrial Average closed up 0.1%.
Altogether, the S&OP 500 rose 4.97 points to 5,482.87. The Dow added 36.26 points to 39,164.06. The Nasdaq gained 53.53 points and closed at 17,858.68.
Gains in retailers and communications services companies helped offset losses in consumer goods manufacturers, financial stocks and other market sectors. Amazon.com rose 2.2% and Meta Platforms added 1.3%.
Walgreens boosts alliance fell 22.2% for the biggest drop in the S&P500. Its reported results fell short of forecasts and lowered its outlook. The company said it could close hundreds more stores over the next three years.
Jeans maker Levi Strauss plunged 15.4% after its latest quarterly revenue results fell short of analysts’ expectations, along with its current earnings forecast for the year.
Spice maker McCormick rose 4.3% for one of the market’s biggest gains after beating analysts’ earnings forecasts.
Chipmaker Micron Technology fell 7.1% after its latest forecast left investors disappointed.
Treasury yields fell in the bond market. The yield on the 10-year Treasury, which influences interest rates on mortgages and other consumer loans, fell to 4.28% from 4.33% late Wednesday. The two-year Treasury yield fell from 4.75% to 4.71%.
The stock market has been lethargic this week ahead of Friday’s release of the government’s next influential inflation report. The personal consumption expenditures index, or PCE, is the Fed’s preferred measure of inflation.
Economists expect the report to show a slight reduction in inflation to 2.6% in May, after a reading of 2.7% in April. This represents a drop from PCE’s peak of 7.1% in mid-2022. Other measures of inflation, including the consumer price index, have also declined significantly over the past two years.
The latest updates on inflation could influence the central bank decision about when to start cutting interest rates, which remain at their highest level in more than 20 years and which are having an impact around the world. Wall Street is betting that the central bank will begin cutting interest rates at its September meeting.
A government update said the American economy expanded at an annual rate of 1.4% from January to March. The number represents a slight revision from a previous estimate of 1.3%. It is the slowest quarterly growth since spring 2022.
A slowdown in consumer spending could help ease inflation further, but an excessive slowdown could result in a more painful impact on the economy. The Federal Reserve is trying to time its efforts to control inflation back to its 2% target without slowing the economy so much that it goes into recession.
YOU&P 500 is on track to mark its fourth consecutive winning week. With one more trading day left this month, the index is up just under 4% in June and around 15% so far this year.
In energy trading, benchmark U.S. crude rose 47 cents to $82.21 a barrel. Brent crude, the international standard, rose 46 cents to $86.85 a barrel.
In currency trading, the US dollar rose to 161.00 Japanese yen from 160.72 yen. The euro cost US$1.0693, down from US$1.0709.
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