By Atoyebi Nike
Stocks moved narrowly on Thursday as traders pulled back from the buying spree that had driven markets to record highs in recent months, with upcoming US inflation and jobs data expected to provide the next catalysts for direction.
The rally, which followed steep declines triggered by former US President Donald Trump’s April global tariff announcement, had been buoyed by trade deals and expectations of further interest rate cuts by the Federal Reserve.
Last week, the Fed cut rates citing weak labour market conditions and subdued inflation, projecting two more reductions this year. However, Chairman Jerome Powell urged caution, warning that stocks were “fairly highly valued” and that “there was no risk-free path” on rates.
Investors are closely watching the release of the personal consumption expenditure index, the Fed’s preferred inflation gauge, this week, and next week’s non-farm payrolls report for fresh signals.
In Asia, Tokyo traded firmly in positive territory, while Hong Kong was flat despite Alibaba adding more than one percent after Wednesday’s nine percent surge on its AI investment plans. Its US-listed shares also rose by over eight percent. Chery Automobile, China’s largest car exporter, soared over 13 percent in its Hong Kong debut after raising US$1.2 billion in its IPO.
Meanwhile, Shanghai, Sydney and Singapore saw small losses, while Taipei, Seoul and Manila were little changed. Wall Street closed lower for the second day across all three major indexes.
Despite recent caution, Bank of America economists maintained optimism, noting that “with major regions in easy fiscal mode, and with the Fed cutting against a backdrop of broadening and accelerating profits, it’s not hard to argue for a boom in earnings per share and GDP growth.”
