Asian Markets Rally as Fresh U.S. Data Fuels Expectations of Fed Rate Cut

Asian markets extended a global equities rally on Wednesday as fresh U.S. economic data reinforced expectations that the Federal Reserve may cut interest rates again next month. Investors reacted positively to signals from several Fed officials who supported another rate reduction, amid concerns over slowing employment growth and mixed inflation trends.

Market sentiment improved further after reports suggested that the top economic adviser to U.S. President Donald Trump was emerging as the leading candidate to take over as head of the Federal Reserve when Jerome Powell’s term expires. The adviser is widely viewed as someone who aligns with the administration’s preference for lower rates, strengthening expectations that the Fed could adopt a more accommodative policy stance.

A series of delayed U.S. economic indicators painted a subdued picture. Private employers shed an average of 13,500 jobs per week in early November, retail sales grew more slowly than expected, and consumer confidence dropped to its lowest level in seven months. Although wholesale inflation rose in September, the increase was mainly driven by higher goods prices, highlighting lingering cost pressures for businesses.

Global markets reacted to the prospect of easier monetary policy. Major U.S. indices closed higher for a third consecutive day, and Asian markets followed with broad gains. Tokyo and Seoul recorded increases of nearly two percent, while markets in Hong Kong, Shanghai, Singapore, Sydney, Taipei, and Wellington also strengthened.

However, some investors remained cautious, pointing to concerns about high valuations—particularly in the technology sector—as the artificial intelligence boom continues to drive massive investment. In China, Alibaba’s shares fell more than one percent after the company reported lower profits due to spending on consumer subsidies and data center expansion.

Key currency and commodity markets also responded modestly, with slight movements in the dollar, yen, and oil prices.