Asian stocks rose on Monday, led by a surge in China and modest optimism over potential interest rate cuts in the United States. MSCI's Asia-Pacific index outside Japan added 1.5%, while China's CSI 300 climbed 1.4% to a level not seen since mid-2022. Japan's Nikkei was up 0.4 percent, South Korea gained 1.1%, and Australia edged 0.2% higher.
Wall Street ended Friday on a high note, with the Dow closing 1.9% higher at a record, the S&P 500 gaining 1.5%, and the Nasdaq adding almost 1.9%. Futures trading on Monday was more hesitant—both S&P 500 and Nasdaq futures were down 0.1%.
Focus on Federal Reserve Policy
Federal Reserve Chair Jerome Powell's dovish statements during the previous week prompted futures markets to price in an 84% likelihood of a quarter-point rate cut in September. Traders are also betting on further easing through the middle of 2025. Treasury yields fell sharply last week, but on Monday, the 10-year note was held steady at 4.268%.
Investors will be looking for insights from New York Fed President John Williams later on Wednesday. But analysts cautioned that more important U.S. inflation data due later this week could dampen expectations of aggressive rate cuts.
Nvidia Earnings in Spotlight
Investors are looking forward to Nvidia's results on Wednesday. The company is estimated to post a 48 percent increase in earnings per share, to $3.12, on revenue of $45.9 billion. Valued by the market at $4 trillion, Nvidia's performance could drive big swings across global markets.
Options trading suggests that the stock could move up or down 6% after the results. Analysts are also hoping for specifics about shipments to China and an update on its U.S. revenue-sharing agreement with the government.
Currencies and Commodities
The dollar was steady at 147.36 yen, following a sharp decline last week, and the euro was trading at $1.1703. Traders predict that the European Central Bank will leave rates unchanged in September but reopen discussions about cuts later this year. The dollar was weaker, providing support for commodities.
Gold was trading at $3,365 an ounce, the price having held onto gains for the week. Oil inched up due to geopolitical tensions restricting Russian supply. Brent crude was down 50 cents, or 0.7 percent, at $67.77 a barrel, while U.S. crude rose 0.1 percent to $63.78.
