Share

US stocks move broadly higher; Dow jumps 200 points

Share

BANGKOK (AP) — Shares surged Wednesday in Asia following a rally on Wall Street spurred by signs the Federal Reserve is ready to cut interest rates to support the U.S. economy against risks from escalating trade wars.

Japan’s Nikkei 225 index jumped 1.8% to 20,773.86 while the Hang Seng in Hong Kong advanced 0.7% to 26,953.77. The Shanghai Composite index gained 0.6% to 2,880.18 and Australia’s S&P ASX 200 climbed 0.6% to 6,367.20. South Korea’s Kospi added 0.2% to 2,071.06. Shares also rose in Taiwan and Southeast Asia.

Shares also were boosted by the Australian central bank’s decision on Tuesday to trim its benchmark interest rate by a quarter of a percentage point in the first such cut in nearly three years.

Australia’s economy expanded at a 1.8% annual rate, 0.4% quarterly, in the first quarter, as the doldrums in trade and the housing market were offset by large inventories, the government reported Wednesday.

But the biggest lift for regional markets came from Fed Chairman Jerome Powell’s comment that the central bank was “closely monitoring” trade developments and would “act as appropriate” to sustain the U.S. economic expansion.

Trending:
Fani Willis Throws a Tantrum to Jim Jordan as Contempt Deadline Arrives

Investors read his remarks as a signal that the Fed will likely cut interest rates later this year.

Fresh hopes for resolving the U.S.-Mexico trade dispute also helped.

Mexican Foreign Minister Marcelo Ebrard said Mexico can likely reach a deal with the U.S. at a meeting Wednesday. That would stave off President Donald Trump’s threat to place 5% tariffs on Mexican goods beginning June 10 as part of a broader immigration dispute.

Automakers rallied. Many vehicle makers import vehicles from Mexico and would be hit particularly hard if the U.S. imposes tariffs. Ford Motor climbed 3.2%, General Motors gained 6% and Fiat Chrysler added 4%.

Investors have been worried the expanding conflicts between the U.S. and some of its biggest trading partners could slow U.S. economic growth and stymie corporate profits. They’ve been dumping stocks for the past month and fleeing to safer holdings such as bonds.

“The concern in the market is that economic data is going to worsen,” said Jeff Zipper, managing director at U.S. Bank Wealth Management. “If economic data worsens, then growth slows down. So obviously a rate cut would provide liquidity into the economy and the marketplace, and that’s what investors are looking at right now.”

The Nasdaq composite rode the rally in technology stocks, gaining 2.7%, to 7,527.12. The index recouped losses racked up a day earlier, when tech stocks slumped over concerns that several big internet companies could face more scrutiny from antitrust regulators.

The S&P 500 index gained 2.1% to 2,803.27, its best performance since Jan. 4. The Dow vaulted 512.40 points, or 2.1%, to 25,332.18.

The Russell 2000 index of small companies picked up 38.58 points, or 2.6%, to 1,508.56.

Related:
Oscar and Emmy Winner Louis Gossett Jr. Dies at Age 87

Powell didn’t explicitly say what the Fed would do, but investors in the futures market are now pricing in a 59 percent chance of a Fed rate cut by July.

Robust market gains earlier this year were partly fueled by the Fed’s adoption of a more patient approach to its rates policy after steadily raising rates for two years. Investors have been hoping it will go further and cut interest rates to give the economy another push.

ENERGY: Benchmark U.S. crude shed 38 cents to $53.10 per barrel in electronic trading on the New York Mercantile Exchange. It gained 0.4% to settle at $53.48 a barrel on Tuesday. Brent crude oil, the international standard, gave up 28 cents to $61.69 per barrel. It closed 1.1% higher at $61.97 per barrel overnight.

CURRENCIES: The dollar slipped to 108.11 Japanese yen from 108.15 yen on Tuesday. The euro strengthened to $1.1261 from $1.1251.

___

AP Business writers Damian J. Troise and Alex Veiga contributed.

The Western Journal has not reviewed this Associated Press story prior to publication. Therefore, it may contain editorial bias or may in some other way not meet our normal editorial standards. It is provided to our readers as a service from The Western Journal.

Truth and Accuracy

Submit a Correction →



We are committed to truth and accuracy in all of our journalism. Read our editorial standards.

Tags:
Share
The Associated Press is an independent, not-for-profit news cooperative headquartered in New York City. Their teams in over 100 countries tell the world’s stories, from breaking news to investigative reporting. They provide content and services to help engage audiences worldwide, working with companies of all types, from broadcasters to brands. Photo credit: @AP on Twitter
The Associated Press was the first private sector organization in the U.S. to operate on a national scale. Over the past 170 years, they have been first to inform the world of many of history's most important moments, from the assassination of Abraham Lincoln and the bombing of Pearl Harbor to the fall of the Shah of Iran and the death of Pope John Paul.

Today, they operate in 263 locations in more than 100 countries relaying breaking news, covering war and conflict and producing enterprise reports that tell the world's stories.
Location
New York City




Conversation