US equities gained on stable bond yields and Asian markets mixed
Asian shares exhibited a mixed performance on Wednesday, following a steadier day for stocks, as both bond yields and bitcoin showed signs of stabilization. US futures experienced an uptick, while oil prices saw a slight increase. Tokyo’s Nikkei 225 surged 1.6% to 50,063.65, driven by significant gains in technology shares, notably Tokyo Electron, which rose by 5.6%, and Adventest, a manufacturer of computer chip testing equipment, which increased by 6.9%. Technology and telecoms giant SoftBank Group Corp. experienced a significant increase of over 8% after reports emerged indicating that its founder, Masayoshi Son, expressed regret over selling shares in chip maker Nvidia to finance other investments. The company’s share price declined following its announcement last month regarding the sale of shares for $5.8 billion. South Korea’s Kospi increased 1.2% to 4,042.40, boosted by tech shares, with Samsung Electronics rising 1.8%. However, Chinese markets declined after data indicated weaker factory activity, with Hong Kong’s Hang Seng falling 1.1% to 25,797.24 and the Shanghai Composite slipping 0.3% to 3,885.36. Australia’s S&P/ASX 200 increased 0.2% to 8,595.20.
On Tuesday, the S&P 500 increased 0.2% to 6,829.37, the Dow Jones Industrial Average rose 0.4% to 47,474.46, and the Nasdaq composite gained 0.6% to 23,413.67. Boeing surged 10.1%, emerging as a major contributor to the S&P 500’s performance after CFO Jay Malave said the plane maker anticipates growth next year in an underlying measure of its cash production. Database company MongoDB also led the market, jumping 22.2% after reporting stronger quarterly results than analysts expected. These gains helped counter a 6.8% decline for Signet Jewelers, which issued a softer revenue forecast for the holiday shopping season, saying it’s expecting a “measured consumer environment.” Another warning came from Procter & Gamble’s CFO, as its shares fell 1.1%, hinting at challenges for US shoppers. Although the US economy appears strong on the surface, it masks deep divisions: lower-income households are struggling with rising prices, while wealthier households benefit from a stock market less than 1% away from its all-time high set in late October.
In the bond market, Treasury yields stabilized after significant increases the previous day. The 10-year yield dipped to 4.08% from 4.09%, while the two-year yield fell to 3.51% from 3.54%. Higher yields often drag down prices of expensive investments. Monday’s jump in yields followed comments from the governor of the Bank of Japan, who signaled a possible interest rate hike. Still, optimism remains that the Federal Reserve will cut its key interest rate at next week’s meeting in Washington. The Bank of Japan is expected to raise its benchmark rate on December 19, according to Tan Boon Heng of Mizuho Bank, who warned that failing to do so may trigger yen selling. However, completing the hike could paradoxically limit yen appreciation while pushing long-end yields higher. The Fed has already cut its overnight interest rate twice this year to support a weakening job market, though lower rates risk worsening inflation, which remains above its 2% target. The situation is further complicated by the US government’s previous shutdown, which delayed reports on the job market and other economic sectors.
In other dealings early Wednesday, bitcoin, which fell below $85,000 on Monday as global bond yields spiked, rebounded to $94,000. US benchmark crude oil rose 3 cents to $58.67 per barrel, while Brent crude added 4 cents to reach $62.49 per barrel. The US dollar declined to 155.68 Japanese yen from 155.87 yen, while the euro climbed to $1.1645 from $1.1626. With markets reacting to shifting central bank expectations, rising tech shares in Asia, and renewed crypto strength, global investors continue to navigate a landscape marked by mixed economic signals and cross-market volatility.
