Global shares rose on Wednesday as a slew of new policies from US President Donald Trump combined with strong corporate earnings to boost investor optimism, while tariff uncertainty kept the dollar near two-week lows.
Netflix shares jumped 14% in after-hours trading as the streaming giant added a record number of subscribers in the latest quarter, allowing it to raise prices for most service plans in the United States and other countries.
This helped lift Nasdaq futures 0.7% in Asia. S&P 500 futures also rose 0.3%. Europe is also set for a higher open, with the pan-European STOXX 50 futures contract
rose 0.2%.
On Tuesday evening, Trump announced that OpenAI, SoftBank and Oracle would form a joint venture called Stargate and invest up to $500 billion in artificial intelligence infrastructure. SoftBank shares jumped 11% in Tokyo, while Oracle was up 7% overnight.
Helping risk sentiment was also relief that Trump did not announce a more comprehensive implementation of tariffs at the start of his second term. Many investors and foreign capital expect tariffs to be among the executive orders Trump signs on his first day in office.
However, he returned to the threat of tariffs on Tuesday, vowing to hit the European Union with new tariffs and saying his government was discussing imposing 10% tariffs on goods from China on February 1.
“I think we have already factored in all the extreme moves,” said Hoe Lon Leng, global head of FX flow and EM rates linear trading at Nomura in Singapore.
“I think Trump seems more results-oriented. I think he wants to do his job well and… that means the recent oil prices, the recent rise in bond yields will influence his position in pushing things to the extreme.”
Japan’s Nikkei jumped 1.6%, tracking broad gains on Wall Street. However, MSCI’s index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 0.1% as declines in Chinese and Hong Kong shares offset big gains in other stocks.
China’s blue chips fell 1% and Hong Kong’s Hang Seng index lost 1.6%.
Temporary rate relief has supported falling Treasury yields. However, the 10-year US Treasury yield edged up 1 basis point in Asia to 4.5866%, after falling 4 bps overnight.
The figure is still up about one percentage point since the Federal Reserve started cutting interest rates in mid-September, reflecting a strong economy and the reduced prospect of large Fed rate cuts this year.
Futures imply a total of 37bps of easing from the Fed this year, with the first rate cut not fully factored in until July.
The US dollar was slightly stronger but held near a two-week low against its peers, after finishing a choppy overnight session with little change.
The euro weakened 0.2% to $1.0412, not far from a three-week high of $1.0435, while the Japanese yen also slipped 0.2% to 155.87 per dollar.
Bitcoin held near a record high of $105,694, after gaining 4% overnight as the top US market regulator established a task force to develop a regulatory framework for crypto assets.
“A path for bitcoin to reach $120,000 is reasonable,” said Billy Leung, investment strategist at Global X.
Oil prices were flat, after falling more than 2% overnight on Trump’s plan to increase US energy production. Brent crude was last at $79.35 a barrel, while U.S. crude was little changed at $75.80 a barrel.
Gold also continued its rise to its previous record high. Spot prices rose 0.4% to a 2-1/2 month high of $2,756.19 an ounce, after surging 1.4% overnight.
Source: Reuters
