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Asian stocks split at October open: Nikkei surges 1.5% while Wall Street's late reversal drags Asia
Softer-than-expected US August PCE inflation and a solid Micron outlook sent Japan's Nikkei 225 up more than 1.4% on the first trading day of October, led by tech stocks; but Wall Street's late-day reversal wiped out the cheer, with Hong Kong futures and South Korea's Kospi weaker.
Why it matters
This is the first trading day of October for global markets, and Asia's split open reveals a market torn between optimism over the Fed's rate path and worries about stretched valuations and high bond yields.
Market snapshot
According to dpa-AFX, the Nikkei 225 was up 973 points (about 1.46%) at 67,727 in mid-session, extending the previous session's gains; Advantest surged more than 6%, SoftBank Group gained over 3% and Tokyo Electron nearly 3%, with semiconductors leading. Hang Seng futures fell 0.7%, South Korea's Kospi lost 0.62% and Japan's broader Topix slipped 0.56%. The yen was steady at 157.39 per dollar.
The data behind it
The Fed's preferred PCE price index rose 0.3% month-on-month in August as expected, but annual PCE inflation came in at 3.4%, well below the 3.7% forecast, while core PCE was 3.0% against expectations of 3.3% — money markets now see less than a 40% chance of a rate hike at the Fed's October meeting; Micron's solid outlook also lifted chip stocks. But Wall Street reversed sharply on Sept. 30: the Dow fell 443 points (0.86%) to 50,927, the S&P 500 slipped 0.25% to cap its worst month since June, and the Nasdaq edged up 0.24% to 26,861; the US 10-year Treasury yield rose to 5.29% and 30-year yields stayed near their highest since 2002.
What to watch
US September jobs data lands Oct. 2, keeping markets in wait-and-see mode; afternoon profit-taking may cap Tokyo's gains, with Asia watching Treasury yields and the dollar. This column reports verified data only and makes no market predictions.
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