In the wake of growing expectations for a rate cut by the Federal Reserve (Fed) this month and the rise of major stock indexes in the U.S. market, most Asia-Pacific stock markets saw gains on Wednesday (December 3rd). The strong rebound of Bitcoin also boosted market sentiment.
On Tuesday, the three major U.S. stock indexes closed higher, marking the sixth day of gains in the past seven trading days. The FedWatch tool by the Chicago Mercantile Exchange (CME) indicates that the market currently expects an 89.2% probability of a 25 basis points rate cut by the Federal Open Market Committee (FOMC) at the December meeting, up from 63% a month ago.
The market is also closely watching the selection of the next Federal Reserve chairperson, with reports suggesting White House economic adviser Kevin Hassett as one of the frontrunners.
Driven by these factors, major U.S. stock indexes all trended higher, with the Dow Jones Industrial Average rising by 0.39%, the S&P 500 climbing 0.25%, and the Nasdaq Composite gaining 0.59%.
The U.S. tech sector surged by 0.8%, with stocks like Apple, NVIDIA, and Microsoft all seeing gains of around 1%. Boeing soared by 10.1% as the company predicted increased delivery volumes for its 737 and 787 aircraft next year, acting as the biggest driver of the Dow’s rise.
Following a significant sell-off the previous day, Bitcoin made a strong comeback, surging over 7% to surpass the $90,000 mark once again, with the latest trading price at $91,462. Stocks related to cryptocurrencies such as Strategy and Coinbase also rose in tandem.
Boosted by Wall Street’s tech stocks, most Asian markets opened higher on Wednesday, with South Korea’s Kospi index up by 1.06%, Japan’s Nikkei 225 index rising by 0.76%, Taiwan’s weighted index climbing by 0.60%, and Australia’s S&P/ASX 200 index up by 0.32%.
However, the Hong Kong market opened down by 0.41%, and the Shanghai Composite Index also fell by 0.07%.
South Korea’s central bank released revised third-quarter GDP figures showing a 1.8% year-on-year growth, higher than the initial estimate of 1.7%.
While Australia saw a robust 2.1% year-on-year GDP growth in the third quarter, marking the strongest expansion since the third quarter of 2023, it was slightly below the 2.2% expected by Reuters economists.
Despite recent market volatility in the U.S., foreign private demand for American stocks has remained strong over the past year, reaching record levels.
According to the U.S. Treasury International Capital (TIC) data, in the 12 months leading up to September, foreign private purchases of U.S. stocks totaled $646.7 billion, surpassing the record of $392 billion in 2021 and hitting a new all-time high.
This record-breaking influx of funds represents the highest foreign inflow into a single U.S. asset class during the same period, even exceeding U.S. government bonds.
Market columnist Jamie McGeever from Reuters noted that this indicates overseas investors’ continued bullish outlook on U.S. stocks, despite international stock markets outperforming Wall Street this year and U.S. stocks representing 65% of global equity market capitalization.