Shares in Asian markets rose on Thursday after a slight pullback in U.S. stocks from their recent highs. Japan’s Nikkei 225 index surged by over 2%, while U.S. futures and oil prices also saw gains. The positive momentum in Asia followed an announcement by the Chinese government regarding plans to provide cash handouts or discount vouchers to low-income individuals before the upcoming National Day holidays. This move, which includes direct payments to address weakened consumer spending, is unusual for China.
According to a statement on the Ministry of Civil Affairs’ WeChat social media account, authorities will be issuing a one-time living allowance to the extremely poor, orphans, and other vulnerable individuals in commemoration of the 75th anniversary of the founding of New China on October 1. In response to this news, Hong Kong’s Hang Seng index rose by 1.7%, reaching 19,461.25, while the Shanghai Composite index increased by 0.6% to 2,914.19. Meanwhile, the Nikkei in Tokyo advanced by 2.5% to 38,812.94.
South Korea’s Kospi gained 2.1% to reach 2,649.51 following semiconductor maker SK Hynix’s announcement of the production of a new memory chip for artificial intelligence, resulting in an 8.8% surge in SK Hynix shares. Australia’s S&P/ASX 200 also saw a rise of 0.8% to 8,187.60. In the U.S., the S&P 500 slipped by 0.2% to 5,722.26 on Wednesday, after setting an all-time high for the 41st time this year. Similarly, the Dow Jones Industrial Average dropped by 0.7% to 41,914.75, while the Nasdaq composite edged up by less than 0.1% to 18,082.21.
Treasury yields experienced an increase in the bond market following a previous day’s decline due to a disappointing update on U.S. consumer confidence. The concerns regarding the weakened consumer confidence have raised expectations for the Federal Reserve to implement a significant interest rate cut at its upcoming meeting as a measure to support the economy. On Wall Street, online fashion styling service Stitch Fix saw a 39.5% decline in its stock after projecting weaker revenue for the current quarter compared to the previous year. KB Home also faced a 45.4% drop after reporting profit slightly below analysts’ expectations, despite an increase in orders in August due to reduced mortgage rates.
The next crucial economic indicator that the market is anticipating is the monthly update on the U.S. job market. Investors are closely monitoring the hiring trends, especially with the significant decline in inflation compared to two years ago. The Federal Reserve, after maintaining a high-interest rate for over a year to control inflation, recently showed a shift towards prioritizing job market protection by implementing a larger-than-usual interest rate cut. Additionally, Trump Media & Technology Group observed a 10.5% increase in its stock for the first consecutive gain in two weeks as former President Donald Trump was speculated to potentially sell some shares in the company behind the Truth Social network.
In early trading on Thursday, benchmark U.S. crude oil rose by 6 cents to $69.75 per barrel on the New York Mercantile Exchange, while Brent crude, the international standard, increased by 14 cents to $73.04 per barrel. The U.S. dollar also saw gains, rising to 144.83 Japanese yen from 144.76 yen, with the euro trading at $1.1142, up from $1.1133.