Stock market today: Asian shares zoom higher, with Nikkei over 42,000 after Wall St sets new records

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Asian stocks advanced on Thursday after a big rally on Wall Street, with Japan’s Nikkei 225 index rising above 42,000 points for the first time.

Futures for the Dow Jones Industrial Average and the S&P 500 fell 0.1%.

The Nikkei 225 index jumped 0.9% to close at 42,224.02, again surpassing its all-time high after closing at record highs on Tuesday and Wednesday.

Buying was strong across a broad range of stocks, with electronics makers leading the gains. Sony Group Corp. rose 3.6% and precision instrument maker Disco Corp. gained 3.4%. Electrical components maker Murata Manufacturing Corp. rose 2.8%.

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Elsewhere in Asia, Hong Kong’s Hang Seng Index rose 2.1% to 17,831.40 points, while the Shanghai Composite Index rose 1.1% to 2,970.39 points.

In Seoul, the Kospi rose 0.8% to 2,891.35 points.

Australia’s S&P/ASX 200 rose 0.9% to 7,889.60. Taiwan’s Taiex advanced 1.6% with Taiwan Semiconductor Manufacturing Corp. rising 3.4%.

Shares of TSMC, which makes chips for Nvidia and other companies leading the business world’s rush into artificial intelligence technology, rose 3.5% on Wednesday after it said its revenue rose about 33% in June from a year earlier.

The promise of big profits in the future from artificial intelligence has propelled Nvidia in particular to astonishing heights over the past year, with Nvidia up another 2.7% on Wednesday to bring its year-to-date gains to 172.5%. It was once again the single strongest force driving the S&P 500 higher as Wall Street’s rally extended into a seventh day, with big tech companies leading the way.

The U.S. stock market jumped to all-time highs on Wednesday, led by big tech companies whose shares rose on the mania for artificial intelligence.

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Hopes of a rate cut also sent markets higher.

The S&P 500 jumped 1% and broke above 5,600 for the first time, closing at 5,633.91.

The Nasdaq Composite Index rose 1.2% to 18,647.45 points, and the Dow Industrials Index rose 1.1% to 39,721.36 points.

Advanced Micro Devices was another major force behind the stock market jump, jumping 3.9% after announcing a $665 million deal to buy Silo AI, a European artificial intelligence lab.

Markets hit record highs despite slowing US economy and increasing pressure on low-income households.

Hopes that inflation will slow enough to allow the Federal Reserve to make long-awaited interest rate cuts later this year are also fueling buying enthusiasm.

Federal Reserve Chairman Jerome Powell returned to Congress to testify on interest rates, repeating many of his comments from the day before. He said he was “not sending any signals” about when he would cut rates, but he pointed to the downside of delaying it.

“More good data would boost our confidence” and pave the way for a rate cut, Powell said.

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Many on Wall Street expect the Fed to start cutting key interest rates in September, but traders have a long history of getting ahead of themselves. Powell acknowledged that inflation has improved recently but stressed that the Fed is not confident that inflation is sustainably moving toward its 2% target.

Later Thursday, the U.S. government will release its latest monthly inflation update. Economists expect it to show that American consumers paid 3.1% more for food, airfare and everything else in June than a year earlier. That would be slightly slower than the 3.3% inflation rate in May.

“With the Fed keen to see more good data, US inflation data will play an important role in validating whether markets are getting ahead of themselves in pricing in a rate cut as early as September this year,” IG’s Yip Jun Rong said in a comment.

Later this week will also mark the unofficial start of the final earnings season. Delta Air Lines, JPMorgan Chase and others will report their earnings for the spring, from April to June, and Wall Street is hoping the S&P 500 will post its strongest growth in more than two years.

In other trading, the price of benchmark U.S. crude oil rose 60 cents to $82.70 a barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the global benchmark, rose 63 cents to $85.71 a barrel.

The US dollar fell to 161.75 Japanese yen from 161.66 yen, and the euro rose to $1.0837 from $1.0832.

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