Shares mostly gained in Asia on Monday after U.S. stocks capped a mostly dismal week with a broad rally that still left the benchmark S&P 500 down 2% for the week.
U.S. futures and oil prices advanced.
One shadow over markets was cleared when U.S. lawmakers passed a budget deal in the early hours of Saturday, narrowly averting a pre-Christmas government shutdown.
Tokyo's Nikkei 225 index jumped 0.9% to 39,039.18, while the dollar was trading at 156.53 Japanese yen, up from 156.48 yen.
Honda Motor Co. and Nissan Motor Corp. were expected to hold a news conference later Monday as reports speculated on a possible merger between Japan’s second and third-largest automakers. Honda's shares, which fell after news of the talks on a deal surfaced last week, were up 0.8%. Nissan's, which had soared, fell 0.9%.
Elsewhere in Asia, Hong Kong's Hang Seng gained 0.7% to 19,857.98, while the Shanghai Composite index edged 0.2% higher.
Australia's S&P/ASX 500 jumped 1.4% to 8,175.80.
South Korea's Kospi added 1.5% to 2,440.62 and Taiwan's Taiex jumped 2.5%., with TSMC, the world's biggest computer chip maker, gaining 3.9%. Hon Hai Precision Industry, which reportedly has been maneuvering to buy a big stake in Nissan, jumped 3.8%.
In Bangkok, the SET edged 0.1% higher.
On Friday, the S&P 500 rallied 1.1%, closing at 5,930.85. The Dow Jones Industrial Average jumped 1.2% to 42,840.26 and the Nasdaq composite gained 1% to 19,572.60.
Roughly nine of every 10 stocks in the S&P 500 rose.
Superstar stock Nvidia and other Big Tech companies led the market, which got a lift after a report said a measure of inflation the Federal Reserve likes to use was slightly lower last month than economists expected. It’s an encouraging signal following recent reports suggesting inflation may be tough to get all the way down to the Fed’s 2% goal from its peak above 9%.
The threat of higher inflation was one of the reasons Fed Chair Jerome Powell gave last week when the central bank hinted it may deliver fewer cuts to interest rates next year than it earlier expected.
That warning sent a shock through the stock market, which had run to 57 all-time highs this year amid the widespread assumption the Fed would deliver a string of cuts to rates into 2025. Now traders are largely betting on one, two or perhaps even zero next year, according to data from CME Group.
Critics had been warning stock prices were vulnerable to drops after running so high and that the market likely needed everything to go correctly to justify its stellar gains for the year. Besides the diminished hopes for several rate cuts next year, Wall Street got another reminder late Thursday that everything may not go as expected.
The U.S. stock market has lost a chunk of its gain since Trump’s win on Election Day, which raised hopes for faster economic growth and more lax regulations that would boost corporate profits. Worries have risen that Trump’s preference for tariffs and other policies could lead to higher inflation, a bigger U.S. government debt and difficulties for global trade.
In other dealings early Monday, U.S. benchmark crude oil picked up 40 cents to $69.86 per barrel.
Brent crude, the international standard, was up 36 cents at $73.30.
The euro rose to $1.0441 from $1.0433.
AP Writers Stan Choe and Matt Ott contributed.
This article was written by Elaine Kurtenbach from The Independent and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.