Global Market Today: Asian stocks rise after soft US CPI, Kospi rallies

Asian shares rose as cooler-than-expected US inflation data reduced expectations of Federal Reserve interest-rate hikes and the artificial intelligence trade gathered fresh momentum. Oil rose.

MSCI’s Asia Pacific equities gauge climbed 1.2%, with more than three stocks advancing for every decliner. South Korea’s Kospi jumped more than 6%, led by a 10% gain in SK Hynix Inc. after its American depositary receipts surged 27%. Shares also rose in Japan and Australia, putting the regional benchmark on track for a second day of gains.

Treasuries steadied after a rally sent yields sharply lower Tuesday as traders unwound bets that the Fed would begin raising interest rates as soon as this month. The dollar weakened against all of its Group-of-10 peers, while gold held its gains from Tuesday to trade around $4,050 an ounce.


Oil rose for a third day as President Donald Trump threatened further strikes on Iran, hours after the US resumed its blockade on the Islamic Republic’s shipping through the Strait of Hormuz. Global benchmark Brent advanced 1.8% to above $86 a barrel after surging 11% in the previous two sessions.

The weak US inflation numbers and a strong start to the earnings season have revived the AI trade, boosting technology stocks after a recent bout of volatility. While the data gives the Fed more room to keep rates on hold, escalating tensions in the Middle East continue to cloud the inflation outlook by threatening higher energy prices.

“Softer than expected CPI is a big relief,” said Tiffany Wilding at Pacific Investment Management Co. While the “report will not eliminate discussion of further tightening entirely, it should effectively remove a July rate hike from consideration.”

Attention in Asia will once again be on the chips sector after a volatile session on Tuesday.

The premium for SK Hynix’s ADRs over their Korean-listed shares soared to more than 50%, just three days after making their US trading debut.

Earlier, the S&P 500 rose with after major banks posted solid results, while a rally in chipmakers helped lift the Nasdaq 100. International Business Machines Corp. sank 25% on a sales miss.

In oil, traders are paying close attention to refined products. Fuel markets in the US and Europe are flashing record tightness as tensions flare up in the Middle East, threatening more pain for consumers already strained with high prices at the pump.

Also, Russia is struggling to deliver all of the crude it’s being forced to ship overseas in the face of escalating Ukrainian drone strikes on its refineries.

Elsewhere, in testimony before US lawmakers, Fed Chairman Kevin Warsh said central bank officials have no tolerance for high inflation, reiterating a vow to tame price growth.

Warsh said the June inflation reading was better than expected, but has a long way to go.

“I’m not going to show up here and say mission accomplished,” Warsh said. “What I’d say is there’s plenty of work to do.”