TOKYO (AP) — Asian stocks rose Friday as traders eyed a key report on inflation that could influence the Federal Reserve’s next move on interest rates.
Japan’s Nikkei 225 jumped 0.9% in early trade to 39,711.93. In Australia, the S&P/ASX 200 rose 0.6% to 7,803.50. South Korea’s Kospi rose nearly 0.3% to 2,790.97. Hong Kong’s Hang Seng added 0.8% to 17,860.79, while the Shanghai Composite rose 1.0% to 2,976.26.
In Japan, the government reported that the unemployment rate was unchanged from the previous month at 2.6% in May.
On Wall Street, the S&P 500 gained 0.1%. The benchmark index is trading near an all-time high hit last week.
The Nasdaq Composite rose 0.3% and remains just below its all-time high. The Dow Jones Industrial Average closed up 0.1%.
Gains in retailers and communications services companies helped outweigh losses in consumer goods makers, financial stocks and elsewhere. Amazon.com Inc. rose 2.2% and Meta Platforms Inc. added 1.3%.
Walgreens strengthens its alliance It fell 22.2% for the largest drop in the S&P 500. Its reported results fell short of expectations and it trimmed its forecasts. The company said it may close hundreds more stores in the next three years.
Levi Strauss jeans maker shares fell by 15.4% after its latest quarterly revenue results fell short of analysts’ expectations, in addition to its current profit expectations for this year.
McCormick, a seasoning maker, rose 4.3%, one of the biggest gains in the market, after it beat analysts’ earnings expectations.
Chipmaker Micron Technology’s stock fell 7.1% after its latest forecast disappointed investors.
Treasury yields fell in the bond market. The yield on the 10-year Treasury note, which affects interest rates on mortgages and other consumer loans, fell to 4.28% from 4.33% late Wednesday. The yield on two-year Treasury bonds fell to 4.71% from 4.75%.
The stock market has been tepid this week in the run-up to the release of the next influential inflation report from the government on Friday. The Personal Consumption Expenditures Index, or PCE, is the Fed’s preferred measure of inflation.
Economists expect the report to show inflation declining modestly to 2.6% in May, after a reading of 2.7% in April. That’s down from the CPI’s peak of 7.1% in mid-2022. Other inflation measures, including the CPI, have also fallen sharply over the past two years.
Latest inflation-related updates may affect… Central bank decision Speculation is growing about when interest rates, which remain at their highest levels in more than two decades, will start to be cut, affecting the world. Wall Street is betting that the central bank will start cutting rates at its September meeting.
An update from the government said Expansion of the American economy At an annual rate of 1.4% from January to March. This figure is a slight revision to the previous estimate of 1.3%. It represents the slowest quarterly growth since spring 2022.
The report also backed up data from previous economic reports showing that consumers are being squeezed by persistent inflation and rising interest rates. Consumer spending, which fuels economic growth, grew at a rate of just 1.5%, down from an initial estimate of 2%, according to the report.
“The main finding of the report is that the economy remained resilient in the first quarter, but private sector demand growth was muted, led by more consumer caution,” Gregory Daco, chief economist at EY, said in a note.
Slowing consumer spending may help ease inflation, but too much of a slowdown could deliver a more painful blow to the economy. The Fed is trying to time its efforts to tame inflation to its 2% target without slowing the economy so much that it slips into recession.
The S&P 500 is on track for a fourth straight winning week. With one more trading day left this month, the index is up about 4% in June and about 15% so far this year.
The S&P 500 rose 4.97 points to 5,482.87. The Dow Jones added 36.26 points to 39,164.06. The Nasdaq Composite added 53.53 points to close at 17,858.68.
In energy trading, benchmark U.S. crude rose 44 cents to $82.17 a barrel. Brent crude, the international standard, added 39 cents to $86.78 a barrel.
In currency trading, the US dollar rose to 160.96 Japanese yen from 160.72 yen. The price of the euro reached $1.0695, down from $1.0709.
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Associated Press business writers Damian J. Trois and Alex Vega contributed to this report.
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