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(Bloomberg) — Asian stocks gained in the run-up to the US jobs data after weak retail sales reinforced bets that the Federal Reserve will cut interest rates later this year.

The MSCI Asia Pacific Index rose 0.8% to an all-time high, widening its year-to-date outperformance versus European and US equities. MSCI’s gauge for emerging markets also climbed to a record.

Treasury futures held their gains Wednesday after 10-year bond yields dropped to the lowest in about a month in the US session. There will be no cash trading in Treasuries during the Asian day as Japan is closed for a holiday. Gold, which typically benefits when rates are lowered, rose 0.5% as money markets see slightly higher odds of three Fed cuts this year — with two already fully priced in. The dollar weakened against all its Group-of-10 peers.

Unexpectedly weak December retail sales pointed to softer consumer momentum as the year ended, reinforcing expectations the Fed may ease rates later this year. Attention now turns to the jobs report and Friday’s inflation data for further signals on the policy outlook, even as equities waver on concerns over heavy artificial-intelligence spending by technology firms.

The jobs report “will be key,” said Bret Kenwell at eToro. “A weak print could push sentiment further toward risk-off if growth worries start to build, but a solid print may ease some of those concerns.”

Economists predict a 65,000 rise in January payrolls. Such an outcome would be the best in four months. The unemployment rate is seen holding at 4.4%. There will be an annual revision to the jobs count — which is expected to reveal a markdown in the year through March 2025.

On Tuesday, the S&P 500 slipped 0.3% amid weakness in several tech shares, though the gauge remained near the record reached last month. In other corners of the market, silver rose 2%, while Bitcoin continued to trade below $69,000. The Bloomberg Dollar Spot Index fell 0.2%, a fourth consecutive day of decline.

Meanwhile, it’s shaping up to be another blockbuster year for Asian markets, which are outpacing peers in the US and Europe. That’s drawing global investors as extreme swings rattle assets from tech stocks to metals.

Most equity benchmarks in the region have risen in 2026, currencies have shown resilience against external pressures, and demand for credit has pushed spreads to near record lows.

While it’s still early days, and Asia hasn’t been immune to the global volatility, the region has several forces working in its favor.

AI is one such theme, as global investors contend with billions of dollars in spending and the disruptions it’s creating.

What Bloomberg strategists say…

Big Tech is tapping credit markets aggressively to fund AI buildouts. That issuance doesn’t just add leverage, it opens their bond curve to the opaque world of credit derivatives. When CDS start to move, macro funds are quick to press the cross-asset trade, and equity holders can get caught in the downdraft.

Mark Cranfield, Markets Live strategist. For more, read here.

On Wall Street, rising fears about AI keep pummeling the shares of companies at risk of being caught on the wrong side of it all, from small software companies to big wealth-management firms.

The latest selloff erupted on Tuesday when a tax-strategy tool rolled out by a little-known startup, Altruist Corp., sent the shares of Charles Schwab Corp., Raymond James Financial Inc. and LPL Financial Holdings Inc. down by 7% or more.

Last week’s steep drop in software stocks on concern about competition from AI was likely overdone, according to Goldman Sachs Group Inc.’s chief executive officer.

“I think the narrative over the last week has been a little bit too broad,” said David Solomon. “There’ll be winners and losers — plenty of companies will pivot and do just fine.”

Corporate News:

Alphabet Inc. raised almost $32 billion in debt in less than 24 hours, showing the enormous funding needs of tech giants competing to build out their artificial intelligence capabilities. Activist investor Ancora Holdings Group has built a position in Warner Bros. Discovery Inc., according to people familiar with the matter. Ford Motor Co. expects profit to jump in 2026 after being saddled with a surprise tariff bill at the end of last year. Adani Enterprises Ltd. said the US has sought information from the company after a media report alleged it imported Iranian oil products into India, raising potential sanctions concerns. Commonwealth Bank of Australia shares climbed the most in five years after its first-half profit topped expectations, buoyed by growth in its flagship mortgage business and a push in lending more to companies. Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.3% as of 11:57 a.m. Tokyo time Australia’s S&P/ASX 200 rose 1.5% Hong Kong’s Hang Seng rose 0.4% The Shanghai Composite rose 0.3% Euro Stoxx 50 futures were little changed Currencies

The Bloomberg Dollar Spot Index fell 0.2% The euro rose 0.1% to $1.1907 The Japanese yen rose 0.5% to 153.65 per dollar The offshore yuan was little changed at 6.9118 per dollar Cryptocurrencies

Bitcoin was little changed at $68,627.77 Ether rose 0.5% to $2,017.34 Bonds

Australia’s 10-year yield declined six basis points to 4.77% Commodities

West Texas Intermediate crude rose 0.9% to $64.53 a barrel Spot gold rose 0.6% to $5,053.31 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Andrew Janes and Gabrielle Ng.

©2026 Bloomberg L.P.