Asian Markets Mixed as U.S. Stocks Approach All-Time Highs

UPDATE: Asian shares are experiencing a mixed reaction today as the U.S. stock market hovers near its all-time highs. U.S. futures are up, while oil prices are declining, signaling a cautious trading day across the region.

In Japan, the Nikkei 225 index fell by 1.2% to 50,408.70, following a dismal report showing that household spending decreased by 3.0% year-on-year in October, the sharpest drop since January 2024. Major technology shares faced declines, with Advantest Corp. down nearly 2.3% and Tokyo Electron slipping 2.8%.

Meanwhile, traders are waiting for a crucial U.S. inflation report, which could heavily impact Federal Reserve policy. Yesterday, expectations for an upcoming Federal Reserve interest rate cut took a slight hit after reports indicated a stronger job market than anticipated, suggesting less need for intervention.

In China, Hong Kong’s Hang Seng Index dipped 0.1% to 25,921.69, while the Shanghai Composite gained 0.1% to 3,877.83. Investors are acting cautiously ahead of key upcoming economic data, including inflation and trade figures.

South Korea’s Kospi index rose by 1.1% to 4,074.00, driven by significant gains from LG Electronics (+5.6%) and Hyundai Motors (+7.2%). Australia’s S&P/ASX200 saw a minimal increase of less than 0.1% to 8,623.40.

In India, the Sensex edged up 0.1% after the Reserve Bank of India cut its repo rate to 5.25% from 5.5%, citing weak price pressures and expectations of slowing economic growth.

Across the Pacific, the U.S. stock market maintained its calm demeanor despite previous weeks of volatility. The S&P 500 inched up 0.1% to 6,857.12, just 0.5% below its record high. The Dow Jones Industrial Average dipped 0.1% to 47,850.94, while the Nasdaq Composite rose 0.2% to 23,505.14.

One standout performer, Dollar General, surged 14% following stronger-than-expected quarterly profits, indicating that more customers are shopping and the company is improving its profit margins.

Despite concerns about potential overinvestment in AI and the Federal Reserve’s impending decisions on interest rates, the latest job data suggests a resilient job market. Reports indicated that fewer U.S. workers filed for unemployment last week, with the total at the lowest level in over three years. Additionally, layoffs announced last month fell by more than half from the previous surge, indicating that the job market may not require the assistance of lower interest rates.

In the commodities market, U.S. benchmark crude oil dropped by 17 cents to $59.50 per barrel, while Brent crude fell 11 cents to $63.15. The U.S. dollar weakened to 154.77 Japanese yen from 155.12 yen, and the euro edged higher to $1.1657 from $1.1645.

Investors are keenly watching for further developments, particularly regarding U.S. inflation data and the Federal Reserve’s next moves, as these will significantly influence market direction in the coming weeks.