Asian markets rallied broadly on Friday, buoyed by Wall Street’s record-setting gains as investors processed the Federal Reserve’s patient approach to interest rate cuts amid expected fiscal spending under incoming U.S. President Donald Trump.
In Asian trading, U.S. Treasury yields hit new lows, while the dollar remained under pressure after its largest one-day drop against major currencies in over six weeks. This boosted Asia-Pacific stocks, which were on track for a 3.1% weekly gain after recovering quickly from initial election-night dips driven by concerns over Trump’s potential trade tariffs, especially for China.
Optimism around possible stimulus from China also fueled market sentiment as officials prepared to conclude the week-long National People’s Congress Standing Committee meeting. Sources indicated that Beijing may increase fiscal spending to counteract any trade tensions under Trump’s presidency. Mainland Chinese blue-chip stocks rose 0.5% by early morning, adding to Thursday’s 3% surge, while Hong Kong’s Hang Seng gained 1%.
Elsewhere in Asia, Japan’s Nikkei edged up 0.25%, marking a 3.7% weekly increase, while Australia’s benchmark index rose 1% and Taiwan’s main index climbed 0.7%. Globally, stocks were on track for a 3.3% weekly advance, with Wall Street leading the charge to record highs.
Trump’s election victory, alongside a Republican-controlled Senate and likely an expanded House majority, defied polling predictions of a close race against Democrat Kamala Harris. His win has ignited market expectations for corporate tax cuts and deregulation, propelling the S&P 500 and Nasdaq to new peaks on Thursday as the Fed indicated a cautious approach to policy adjustments. Fed Chair Jerome Powell underscored confidence in both the economy and current policies.
“We think the economy and our policies are both in a very good place,” Powell stated in his post-meeting remarks, acknowledging uncertainty about the timing and specifics of any Trump administration policies. Analysts widely expect Trump’s tariffs and immigration policies to drive inflation.
On the bond market, U.S. two-year Treasury yields—sensitive to policy outlook—eased to 4.2119%, a pullback from Wednesday’s three-month high. The dollar index ticked up slightly to 104.53 after Thursday’s 0.7% drop, its steepest since late August, following a 1.53% jump on Wednesday—the biggest in over two years.
“The market is moving past the ‘honeymoon period’ for the president-elect,” said Shoki Omori, chief Japan desk strategist at Mizuho Securities. Omori noted that investors are now closely watching fiscal policy announcements and Trump’s social media posts for potential market shifts.
In commodities, Bitcoin remained steady at $76,000 following a strong 10% weekly rise, reaching an all-time high of $76,980 on Thursday. Trump has signaled an ambition to make the U.S. a global leader in cryptocurrency.
Gold retreated slightly by 0.2% to $2,701.55 after a turbulent week. It plunged over 3% on Wednesday before rebounding by 1.8% overnight, reaching a record high of $2,790.15 last week.
Oil prices slipped on Friday as investors weighed the implications of Trump’s policies on supply and as Gulf Coast producers reduced production ahead of Hurricane Rafael. Brent crude fell 0.22% to $75.46 per barrel, while U.S. West Texas Intermediate (WTI) dropped 0.35% to $72.11.
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