Asian stock markets advanced on Monday, with investors bracing for a pivotal week in U.S. interest rate policy. Japan and Taiwan benchmarks climbed to record highs, while Chinese blue chips touched their strongest level in 10 months.
After meeting with Russian President Vladimir Putin in Alaska on Friday, U.S. President Donald Trump appears more aligned with Moscow on pursuing a peace deal first with Ukraine rather than a ceasefire. Later on Monday, Trump is scheduled to meet Ukrainian President Volodymyr Zelenskiy and European leaders to discuss next steps, though concrete proposals remain unclear.
Prospects of lower global borrowing costs support markets
The key economic event this week is the Federal Reserve’s Jackson Hole symposium, running August 21–23, where Chair Jerome Powell is scheduled to speak on the economic outlook and the central bank’s policy framework. Powell is expected to indicate that risks to the Fed’s employment and inflation mandates are balancing, paving the way for a return of the policy rate toward neutral.
According to the CME Group’s FedWatch tool, traders are currently pricing an 84.8 percent chance of a 25-basis-point rate cut next month.
The prospects of lower global borrowing costs have supported stock markets, with Japan’s Nikkei climbing 0.9 percent to a fresh record high. MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.28 percent after hitting a four-year high last week. Meanwhile, Chinese blue chips surged 1.3 percent, bringing quarterly gains to more than 8 percent so far.
In the European stock market, EUROSTOXX 50 and DAX futures rose 0.2 percent, while FTSE futures gained 0.3 percent.
Read: Crude oil prices climb to $65.89 as Russia supply concerns cool after Trump-Putin meeting
U.S. stock market gains on strong earnings
In the U.S. stock market, S&P 500 futures inched up 0.1 percent while Nasdaq futures gained 0.2 percent, with both hovering near record highs. Investor confidence has been supported by a strong earnings season, as S&P 500 earnings per share grew 11 percent year-on-year, and 58 percent of companies raised their full-year guidance.
Earnings have remained strong for mega-cap tech companies. Although Nvidia has yet to report, the Magnificent 7 collectively posted 26 percent year-on-year earnings per share growth in the second quarter, beating consensus expectations by 12 percent.
In commodities, Brent crude futures gained 4 cents, or 0.06 percent, to $65.89 a barrel by 5:30 GMT, while U.S. West Texas Intermediate crude rose 12 cents, or 0.19 percent, to $62.92.
Meanwhile, spot gold was up 0.64 percent to $3,356.33 as of 5:07 GMT, after hitting its lowest level since August 1. U.S. gold futures for December delivery gained 0.60 percent to $3,402.90.
