Stock market today: Asian shares start June with big gains following Wall Street rally

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Asian shares began June with big gains on Monday after a report showing that inflation in the US is not worsening drove a rally on Wall Street. Hong Kong’s Hang Seng led the region’s gain, jumping 2.7 per cent to 18,560.98 and the Shanghai Composite index rose 0.3 per cent, to 3,095.63. Tokyo’s Nikkei 225 advanced 0.9 per cent to 38,849.65, while the Kospi in Seoul surged 1.9 per cent to 2,687.11. Australia’s S&P/ASX 200 climbed 0.7 per cent to 7,756.80. In Taiwan, the Taiex was up 1.9 per cent.

On Friday, the S&P 500 rose 0.8 per cent to close its sixth winning month in the last seven, ending at 5,277.51. The Dow leapt 1.5 per cent to 38,686.32, and the Nasdaq slipped less than 0.1 per cent to 16,735.02. Gap soared to one of the market’s biggest gains, 28.6 per cent, after delivering stronger profit and revenue for the latest quarter than analysts expected. The retailer also raised its forecasts for sales and profitability this year despite saying the outlook for the economy remains uncertain.

Stocks broadly got a boost from easing Treasury yields in the bond market after the latest reading on inflation came in roughly as expected, at 2.7 per cent last month. That could bolster confidence at the Federal Reserve that inflation is sustainably heading toward its target of 2 per cent, something it says it needs before it will cut its main interest rate. Friday’s report from the US government also showed growth in consumer spending weakened by more than economists expected. Growth in incomes for Americans also slowed last month.

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“Finally, the US economic data is starting to show clear signs that consumers are feeling the pinch. With savings running dry, prices skyrocketing, the job market cooling down, disposable incomes taking a hit, and interest rates still high, spending in 2022 is becoming impossible. It’s like trying to fill a bucket with a hole in it – good luck keeping it full,” Stephen Innes of SPI Asset Management said in a commentary.

The Fed has been keeping the federal funds rate at the highest level in more than 20 years in hopes of slowing the economy enough to stifle high inflation. But if it holds rates too high for too long, it could choke off the economy’s growth and cause a recession that throws workers out of their jobs and craters profits for companies. The yield on the 10-year Treasury fell to 4.50 per cent Friday from 4.55 per cent late Thursday. It had topped 4.60 per cent earlier in the week amid worries about tepid demand following some auctions for Treasurys, a move that had hurt stocks.

Virtually no one expects the Federal Reserve to cut interest rates at its next meeting in a week and a half, but most expect the Fed will cut at least once by the end of the year, according to data from CME Group. Dell tumbled 17.9 per cent even though it matched analysts’ forecasts for profit in the latest quarter. Its stock had already soared 122 per cent in 2024 ahead of the report, meaning expectations were very high, and analysts pointed to concerns about how much profit Dell is squeezing out of each USD 1 in revenue.

Nvidia fell for a second straight day, losing 0.8 per cent, as its momentum finally slows after soaring more than 20 per cent since its blowout profit report last week. Trump Media & Technology Group slumped 5.3 per cent in its first trading following the conviction of Donald Trump on felony charges Thursday. The company, which runs the Truth Social platform, had warned earlier in filings with US securities regulators about potential impact from a conviction.

MongoDB dropped 23.9 per cent despite topping forecasts for profit and revenue. The database company for developers gave forecasts for profit in the current quarter and for this full year that fell short of analysts’ expectations. In other dealings early Monday, US benchmark crude oil gained 46 cents to USD 77.45 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the international standard, rose 46 cents to USD 81.57 after OPEC agreed during the weekend to maintain its production cuts, which have been supporting prices. The US dollar slipped to 157.13 Japanese yen from 157.26 yen. The euro rose to USD 1.855 from USD 1.0848.