Asian Shares Rise as Investors Focus on Fed, Tariffs, and Oil Prices
BANGKOK (AP) — Asian shares experienced modest gains on Wednesday, following the upward trend in U.S. stocks as investors weighed in on comments made by Federal Reserve Chair Jerome Powell to Congress.
Oil prices also gained more than 1% early in the day, reversing a decline of about 6% from the previous day, amid hopes that the fragile ceasefire between Iran and Israel would not disrupt the global flow of crude. Lower oil prices could give the Federal Reserve the leeway to cut interest rates to support the economy, and Powell indicated that the central bank is waiting for the right moment to do so.
The tentative truce between Iran and Israel, announced by U.S. President Donald Trump a day earlier, appeared to be holding steady, easing concerns about a potential disruption of oil supplies.
In Asian trading, Tokyo's Nikkei 225 rose 0.3% to 38,917.08, while the Hang Seng in Hong Kong advanced 0.9% to 24,386.59. The Shanghai Composite index increased 0.5% to 3,437.10. In South Korea, the Kospi edged up 0.2% to 3,110.19, and Australia's S&P/ASX 200 added 0.1% to 8,562.90.
Taiwan's Taiex gained 1.1%, and the Sensex in India rose 0.7%. However, the SET in Bangkok slipped 0.4%.
"The world can now move on to face other difficult choices like tariffs and such issues," said Frances Lun, CEO of GEO Securities in Hong Kong. "I think the market is well on its way to rebound and could again reach new levels."
On Tuesday, the S&P 500 climbed 1.1% to 6,092.18, following significant gains for stocks across Europe and Asia after Trump's announcement of a "complete and total ceasefire" between Israel and Iran. The main measure of Wall Street's health is now within 0.8% of its February record high, having fallen roughly 20% earlier in the spring.
The Dow Jones Industrial Average jumped 1.2% to 43,089.02, and the Nasdaq composite rallied 1.4% to 19,912.53.
Concerns about a potential disruption of global oil supplies due to the Israel-Iran conflict have eased with the recent drop in oil prices. Iran is a significant producer of crude oil, and its potential obstruction of the Strait of Hormuz, through which 20% of the world's daily oil needs pass on ships, had previously raised fears of a supply squeeze.
However, with the global oil market well supplied and OPEC+ steadily increasing production, oil prices could continue to fall as long as the ceasefire holds and a lasting peace solution is found.
"Easing stress in energy markets is excellent news for everyone who doesn't want to see higher oil prices translating into accelerating inflation and tighter monetary policy," said Ipek Ozkardeskaya, a senior analyst with Swissquote Bank. "The market mood has been restored."
The Fed has repeatedly stated that it wants to wait and see how much higher tariffs imposed by Trump will hurt the economy and raise inflation before committing to its next move. So far, the economy seems to be holding up relatively well, though a report on U.S. consumer confidence came in weaker than expected on Tuesday, and inflation has remained only slightly above the Fed's 2% target.
In currency dealings, the U.S. dollar rose to 145
