Asian markets rise following another round of record highs on Wall Street

Asian shares surged on Thursday as U.S. stocks hit record highs, fueled by optimism that inflation is starting to ease. A report revealed that U.S. consumers faced a 3.4% increase in prices for various goods and services in April compared to a year ago, a slight improvement from March’s 3.5% inflation rate.

Investors were relieved by the slowdown in inflation, as it raised hopes that the Federal Reserve might lower interest rates this year. This expectation dominated market sentiment, driving gains in major Asian indices. Tokyo’s Nikkei 225 rose 0.8%, Hong Kong’s Hang Seng climbed 1.6%, and Australia’s S&P/ASX 200 advanced 1.6%.

In the U.S., the S&P 500, Dow Jones, and Nasdaq all closed higher, with tech and high-growth stocks leading the rally. Homebuilders, real estate, and utility stocks also saw gains on expectations of lower interest rates. However, GameStop and AMC Entertainment faced losses after their recent surge.

The bond market reflected the optimism, with the 10-year Treasury yield easing to 4.34%. Traders are now predicting a 95% chance of a Fed rate cut this year. In commodities, U.S. crude oil prices rose to $79.05 per barrel, while Brent crude reached $83.14 per barrel.

Overall, the market sentiment remains positive, with hopes of easing inflation and potential Fed rate cuts driving investor confidence. The focus now shifts to upcoming economic data and Fed announcements for further market direction.