Asian markets opened higher after a positive close on Wall Street. Investors are eagerly awaiting a key U.S. inflation report later in the day, which will likely set the tone for the Federal Reserve's final meeting of the year on Wednesday.
US futures and oil prices rose.
The Nikkei 225 in Tokyo gained 0.5% to 32,959.50. Data released on Tuesday showed that wholesale prices in Japan rose 0.3% in November from a year earlier, marking the slowest increase in nearly three years, suggesting an easing of inflation pressures in the economy.
Hong Kong's Hang Seng rose 1.1% to 16,367.00 and the Shanghai Composite rose 0.1% to 2,993.65.
Chinese leaders are expected to hold an annual economic conference on Tuesday and vow to boost stable growth.
In Seoul, the Kospi rose 0.4% to 2,534.15. Australia's S&P/ASX 200 rose 0.5% to 7,233.90.
India's Sensex gained 0.2% while the SET in Bangkok lost 0.3%.
On Monday, the S&P 500 rose 0.4% to 4,622.44, closing at its highest level in 20 months. The Dow rose 0.4% to 36,404.93 and the Nasdaq gained 0.2% to close at 14,432.49.
The subdued gains are the result of a six-week winning streak for the most important stock indices. The S&P 500 is up 20.4% for the year and the Nasdaq is up 37.9%.
Cigna rose 16.7%, the biggest gain among S&P 500 stocks, after the health insurer announced a $10 billion stock buyback and the Wall Street Journal reported that the company is no longer merging with Humana strives for.
Macy's rose 19.4% after it was reported that an investor group is making an offer to delist the venerable retailer for $5.8 billion.
The government will release its November consumer inflation report on Tuesday. Analysts expect the report to show inflation slowing further to 3.1% from 3.2% in October. On Wednesday, the government will release its November report on wholesale inflation, which is also expected to show that the inflation rate is easing.
Wall Street is largely betting that the Fed will keep its key interest rate in a range of 5.25% to 5.50% until early 2024 and could begin cutting rates in the middle of the year. Analysts also increasingly believe the central bank can carry out a “soft landing,” meaning inflation eases while interest rates are high without sending the economy into recession.
“With inflation falling faster than expected, it now appears likely that the Fed will refrain from further rate hikes,” Brian Rose, a senior U.S. economist at UBS, said in a note to investors. “At the same time, inflation is still too high and the labor market is still too tight for the Fed to consider cutting interest rates any time soon.”
Strong consumer spending and a solid labor market have provided a bulwark for the overall economy, whose growth has slowed but has not yet stalled. The government's jobs report Friday showed that U.S. employers added more jobs last month than economists had expected. Employee wages also rose more than expected and the unemployment rate unexpectedly improved.
Several large companies are set to report results this week and are among the few yet to report results. Software company Adobe will report on Wednesday and Olive Garden owner Darden Restaurants will release its results on Friday.
Government bond yields hardly changed. The yield on the 10-year government bond remained stable at 4.22%.
In energy trading, U.S. benchmark crude oil rose 25 cents to $71.57 a barrel in electronic trading on the New York Mercantile Exchange. It rose 0.1% on Monday. Brent crude, the international standard, rose 24 cents to $76.27 a barrel.
The US dollar fell to 145.60 Japanese yen from 146.16 yen. The euro rose to $1.0769 from $1.07613.
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AP business reporters Alex Veiga and Damian J. Troise contributed.