Soft US Inflation Fuels Record Highs in Asian Markets

Asian markets surged on Wednesday, buoyed by optimism stemming from soft inflation data in the United States. The Nikkei 225 index in Japan reached a record high for the second consecutive day, closing at 43,359.03, reflecting a 1.5 percent increase. Investors reacted positively to indications that potential interest rate cuts by the US Federal Reserve could be on the horizon.

The boost in Asian equity markets followed the performance of US stocks, with both the S&P 500 and the Nasdaq reaching fresh highs on Tuesday. This rally came after data indicated a less severe impact on prices than anticipated from President Donald Trump‘s tariffs. The news has led some investors to speculate that the Federal Reserve, led by Jerome Powell, may lower interest rates in its upcoming meeting.

Market Reactions and Predictions

Trump expressed his views on social media, stating, “Jerome ‘Too Late’ Powell must NOW lower the rate,” while also hinting at potential legal actions regarding renovations to Federal Reserve buildings. Investment analysts, however, offered cautious perspectives. Stephen Innes from SPI Asset Management commented, “Stocks… took the (inflation) number as confirmation that September is shaping up to be the long-anticipated ‘insurance cut’ in an economy still treading water above the break-even line.”

Conversely, Katy Stoves, an investment manager at Mattioli Woods, cautioned that the slight cooling of the economy would not justify a drastic interest rate cut to one percent, as Trump suggested.

As of early afternoon, the Nikkei had already achieved an intraday record of 42,999.71 the previous day. Other markets across Asia mirrored this positivity, with the Hang Seng Index in Hong Kong up by 1.4 percent and the Shanghai Composite increasing by 0.5 percent.

Global Economic Indicators and Corporate Developments

Oil prices experienced a slight decrease following an announcement from OPEC regarding an increase in its demand forecast for 2026, suggesting expectations of stronger global activity in the coming year. Investor attention is also directed toward a scheduled summit in Alaska between Trump and Russian leader Vladimir Putin, focusing on the ongoing conflict in Ukraine.

In corporate news, AI firm Perplexity has made headlines by offering $34.5 billion for Google’s Chrome web browser, which may be sold as part of antitrust proceedings. Meanwhile, Intel shares rose by 5.5 percent on Wall Street after CEO Lip-Bu Tan met with Trump, who had previously criticized him but later praised his leadership.

As of the last trading update, key figures showcased the following performance: the Dow Jones was up by 1.1 percent, closing at 44,458.61, while London’s FTSE 100 recorded a modest increase of 0.2 percent, settling at 9,147.81.

With ongoing developments in both economic indicators and corporate strategies, market participants remain vigilant as they navigate the complexities of the current financial landscape.