Asian stocks: Asian stocks track US gains on Fed rate cut bets

Stocks rose in Japan — where markets reopened after a holiday — and in South Korea. US shares advanced Monday as tech stocks extended their recovery from last week’s slump and traders braced for a wave of economic data. A gauge of Chinese firms listed in the US climbed 2.8% after Presidents Donald Trump and Xi Jinping held their first talks since agreeing to a tariff truce last month.

In extended trading, Alphabet Inc. shares rose and Nvidia Corp. fell after The Information reported that Meta Platforms Inc. is in talks to spend billions of dollars to use Google’s AI-focused chips.

Signs that the Fed may soon lower rates lifted markets after a choppy week dominated by unease over stretched AI valuations and uncertainty about monetary policy. Fed Governor Christopher Waller boosted sentiment by signaling support for a rate cut next month. The renewed optimism fueled the rebound, and some investors are viewing November’s pullback as a setup for a December rally.

“Many of November’s fears about AI and a cratering job market have ended up not coming to fruition,” said David Laut, chief investment officer at Kerux Financial. “That suggests that we are seeing a traditional market pullback in recent weeks and not the start of a deeper correction.”

Waller’s remarks echoed those of other Fed officials, including San Francisco Fed President Mary Daly, who also voiced support for a December rate cut in a Monday interview. New York Fed President John Williams similarly moved markets on Friday by noting that a near-term cut remains on the table.There has also been no effort by the Fed leadership to “clarify” market interpretation of Williams’ comments Friday, Evercore ISI’s Krishna Guha and Marco Casiraghi wrote in a note published on Monday.“They were likely approved by Powell and signal the leadership expects to push through a December rate cut,” they wrote.

US 10-year Treasury yields declined four basis points to 4.02% on Monday, with money markets now pricing a roughly 90% chance of a cut at the Fed’s upcoming December meeting, following weeks of shifting expectations.

Gold edged up 0.1% Tuesday, following a 1.8% jump in the prior session. Lower rates typically make non-yielding bullion more appealing to investors.

In other corners of the market, Bitcoin continued its volatile trading, edging lower after two days of gains. Oil steadied as investors tracked a risk-on mood in wider financial markets, which countered the impact of progress in peace talks over Ukraine that could pave the way for increased crude supplies.

Ahead of Thanksgiving and Black Friday, September retail figures due Tuesday are expected to show a moderation as consumers remain squeezed by high prices.

Other data due this week include the producer price index and durable goods orders for September.

Jobless claims on Wednesday, covering the November survey week, will take on added importance as the Fed leans on alternative indicators in the absence of payroll figures.

“There are increasing signs that the economy remains sluggish, which will put additional emphasis on the retail sales release this week, although once more the data will be slightly historic,” said Richard Hunter, head of markets at Interactive Investor. “There will be some hopes that the recently guarded sentiment will at least temporarily be erased.”