Global Market Today: Asian stocks extend rally to record, gold falls

The Nikkei 225 Index continued its election-fueled rally to rise over 1% to set a new record, while stocks also opened higher in South Korea and Australia. That pushed the MSCI Asia Pacific Index to an all-time high. Asian gains came after the S&P 500 climbed to close near a record on Monday, as some of the hardest-hit stocks in last week’s selloff rebounded.

The dollar held its losses and Treasuries were steady as traders geared up for Wednesday’s US jobs report. Gold and silver fell in early trading on Tuesday as investors took profits in a choppy market that’s still trying to find a floor following a historic rout.

The gains in stocks signaled easing concerns around the AI trade that came to a head in the past two weeks, lashing software companies and casting a pall over high-spending tech companies. While that plays out, traders are now bracing for key economic data that may shape expectations for the Federal Reserve’s interest-rate path.

“When markets sell off like certain areas in tech have, there’s often knee-jerk rallies,” said Sameer Samana at Wells Fargo Investment Institute. “Time will tell if we need a retest or if enough value was created.”

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In another sign of heavy spending by tech companies, Alphabet Inc. is set to raise $20 billion from a US dollar bond offering — exceeding the expected $15 billion — while also pitching investors on its first-ever sales in Switzerland and the UK. The UK deal would include a rare 100-year bond.
Elsewhere, the yen weakened on Tuesday after trading around 156 per dollar in the last session following Prime Minister Sanae Takaichi’s historic election triumph during the weekend. Brent crude oil rose for a second day on Monday as rising tensions in the Middle East centered on OPEC member Iran added a risk premium to prices. Bitcoin wavered near $70,000.The focus this week is on a packed run of US economic data, including the two most consequential readings: employment and inflation.

The jobs report — due Wednesday — is expected to show payrolls rose 69,000 in January. The unemployment rate is seen steady at 4.4%. The data will also include historical revisions that are anticipated to show a sizable downward adjustment to payrolls in the year through March 2025.

In Friday’s consumer price index, economists will look for more evidence that inflation is on a downward trend. Before that, figures on Tuesday are projected to show solid retail sales.

Those releases could shape expectations for the Fed’s next move on interest rates. Traders are broadly expecting policymakers to leave rates on hold when they meet next month as they did in January when they voted to keep them at 3.5% to 3.75%.

Treasury yields fell on Monday after National Economic Council Director Kevin Hassett said lower US jobs numbers can be expected in the months ahead as population growth slows.

“We think the stabilizing labor market — marked by modest hiring and limited layoffs — should help keep the Fed on track to cut rates once or twice this year, assuming price pressures continue to ease,” said Angelo Kourkafas at Edward Jones. “Lower interest rates should reduce borrowing costs for consumers and businesses, helping support the economy and corporate profits.”