(Bloomberg) — Asian shares rose Tuesday, buoyed by upbeat US earnings and indications that tensions between Washington and Beijing were easing.
Benchmarks in Japan and Australia climbed with stocks in South Korea jumping over 1% at the open. US equity futures edged higher after the S&P 500 and the Nasdaq 100 both rose more than 1% Monday. A gauge of US-listed Chinese companies advanced 2.4%, its best showing in a week. Gold extended gains in early Asian trading, even as some warned about a potential bubble in the precious metal.
The S&P 500 logged its biggest two-day gain since June on Monday, with about 85% of companies beating profit estimates so far. Strong third-quarter earnings helped temper worries over the US government shutdown, while hopes of progress in US-China trade talks lifted sentiment. President Donald Trump reiterated his threat to follow through on a tariff hike on Chinese goods “if there isn’t a deal” by Nov. 1, but said he plans to meet President Xi Jinping next week.
“Thank God for earnings season,” said Callie Cox at Ritholtz Wealth Management. Given the US government shutdown, analysts have been deprived of data for weeks, leading to “panic around headlines,” she said.
Earlier this month, markets were roiled as Trump raised the prospect of a sky-high tariff rate, citing China’s “hostile” export controls. Soybean futures rallied Monday, with growers holding out hope that Trump will make a deal with China to restart stalled American exports.
Separately, shares of critical mineral producers jumped in Sydney on Tuesday after Trump signed an agreement with Australian Prime Minister Anthony Albanese to boost America’s access to rare earths and other key materials.
US Inflation
After being delayed by the US government shutdown, the Bureau of Labor Statistics will release the September consumer price index on Friday. The data, originally slated for Oct. 15, will give Federal Reserve officials a critical piece of information on inflation ahead of their Oct. 30 meeting.
Economists in a Bloomberg survey forecast the core CPI, which excludes food and fuel for a better snapshot of underlying inflation, to have climbed 0.3% for a third straight month as higher import duties continue to gradually filter through to consumers. The projected monthly gain will keep the annual core CPI at 3.1%.
“September core CPI likely moderated slightly due to cooling services prices offsetting additional tariff passthrough into goods prices,” said Oscar Munoz at TD Securities. “Energy prices likely boosted headline CPI.”
Friday’s inflation data may take on greater importance due to the government shutdown-driven data drought, said Rick Gardner at RGA Investments. He still sees a Fed cut in October and noted that a key test will be big tech earnings, with investors looking for clarity on how spending on artificial intelligence is leading to profitability.
“We are seeing the typical seasonal volatility in October, but the recent swings have been relatively shallow by historical standards, as the buy-the-dip mentality appears to be in play,” Gardner said.
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 9:16 a.m. Tokyo time Hang Seng futures rose 1.4% Japan’s Topix rose 0.4% Australia’s S&P/ASX 200 rose 0.6% Euro Stoxx 50 futures rose 0.2% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1651 The Japanese yen was little changed at 150.61 per dollar The offshore yuan was little changed at 7.1226 per dollar The Australian dollar was little changed at $0.6518 Cryptocurrencies
Bitcoin fell 0.7% to $110,323.19 Ether fell 0.7% to $3,971.05 Bonds
The yield on 10-year Treasuries was unchanged at 3.98% Japan’s 10-year yield declined one basis point to 1.660% Australia’s 10-year yield declined three basis points to 4.12% Commodities
West Texas Intermediate crude fell 0.1% to $57.45 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.
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