HONG KONG – Asian shares were mostly higher in early Thursday trading, after Wall Street recovered some losses from the day before.
Japan's benchmark Nikkei 225 momentarily reached a record high in early trading but slipped later to 39,794.13, down 0.7%. Australia's S&P/ASX 200 rose nearly 0.1% to 7,740.80. South Korea's Kospi added 0.5% to 2,654.45. Hong Kong's Hang Seng shed 0.1% to 16,417.39, while the Shanghai Composite gained 0.5% to 3,053.72.
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“The positive handover from Wall Street, alongside lower Treasury yields and a weaker U.S. dollar, may offer some relief as Fed Chair’s testimony failed to drive much hawkish deviation from his usual script,” said Yeap Jun Rong, market analyst at IG.
Federal Reserve Chair Jerome Powell said again that cuts to interest rates may be coming this year, but that the Fed needs more data showing inflation is cooling before it will act.
The S&P 500 rose 26.11 points, or 0.5%, to 5,104.76. The benchmark index fell 1% a day prior.
The Dow Jones Industrial Average rose 75.86 points, or 0.2%, to 38,661.05. The Nasdaq composite rose 91.95, or 0.6%, to 16,031.54.
Nvidia was the strongest force pushing upward on the S&P 500 as it rose 3.2%. Meta Platforms also steadied itself and rose 1.2% a day after sliding 1.6%. They’re among the market’s most influential stocks because of their massive size.
Big Tech stocks have been disproportionately responsible for the S&P 500’s run to records on expectations for strong continued growth. That has raised the bar of expectations for them to justify their high stock prices, leading to some painful drops earlier this week.
CrowdStrike jumped 10.8% after the cybersecurity company reported stronger profit for the latest quarter than analysts expected. It also gave a forecast for upcoming profit that topped Wall Street’s estimates.
Shares of the troubled New York Community Bancorp bounced around and eventually finished 7.5% higher after it announced a lifeline of more than $1 billion from a group of investors, including Steven Mnuchin, the former U.S. Treasury secretary under President Donald Trump. It nearly halved earlier in trading before being halted for news. The regional bank has lost 66% of its value this year amid falling values in commercial real estate and acquisitions it made.
An index of regional bank stocks pared most its losses following the announcement. The KBW Nasdaq Regional Banking index slipped 0.4% after being down as much as 3.1% earlier in the afternoon.
As always, Wall Street scrutinized each of Powell's words for hints about when the Federal Reserve could begin cutting its main interest rate, which is at its highest level since 2001. Such a move would release pressure on the financial system and goose prices for investments.
Powell said again that high interest rates are putting downward pressure on the economy to get inflation under control. He also said, again, that the Fed needs greater confidence inflation is moving sustainably toward its target of 2% before acting. Cutting too soon could allow inflation to reaccelerate.
“We have some confidence of that,” Powell said about inflation moving down toward its target.
“We want to see a little more data so we can become more confident.”
Traders have already shelved earlier expectations for a cut in March, and they’re now eyeing June as the likeliest beginning.
A report in the morning did little to change those expectations. It said U.S. employers were advertising nearly 8.9 million jobs at the end of January, close to the same number as a month before.
Wall Street's hope has been for continued but more modest growth in job openings. Such a slowdown could help the economy thread the needle and stay out of recession while also removing upward pressure on inflation. That in turn could get the Federal Reserve to cut rates.
The job-openings data likely changed little and support the Fed's current stance, “which is one of patience on future policy decisions,” according to Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
The Fed's latest report on U.S. business and economic conditions said economic activity increased slightly since early January. The “Beige Book” released Wednesday also said that the Fed’s 12 regional bank districts are seeing the tight labor market ease a bit.
Foot Locker tumbled 29.4% even though it reported stronger profit for the latest quarter than analysts expected.
In the bond market, the yield on the 10-year Treasury slipped to 4.11% from 4.14% late Tuesday.
In energy trading, benchmark U.S. crude inched down 1 cent to $79.12 a barrel. Brent crude, the international standard, stood unchanged at $82.96 a barrel.
In currency trading, the U.S. dollar edged down to 148.74 Japanese yen rom 149.32 yen. The euro was unchanged at $1.0902.
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AP Business Writer Stan Choe contributed to this report.