Asian shares displayed a mixed performance on Friday, influenced by a surge in tech stock buying that propelled Wall Street to record highs. U.S. futures and oil prices also showed an upward trend, indicating a positive market outlook.
Despite the ongoing shutdown of the U.S. government, markets seem largely unfazed. This shutdown arose after Democratic and Republican lawmakers could not come to a consensus on funding. U.S. President Donald Trump and congressional leaders are not expected to convene in the near future. The Democrats remain steadfast in their demands to maintain healthcare funding and have cautioned against potential price spikes impacting millions of Americans.
In Japan, the Nikkei 225 index climbed nearly 1.7%, reaching 45,691.32, buoyed by gains in technology stocks. This increase occurred despite data revealing that Japan's unemployment rate rose to 2.6% in August, the highest figure in 13 months and surpassing the anticipated 2.4% rate. Notably, shares in Hitachi surged by 9.2% following a memorandum of understanding with OpenAI to supply cooling systems for data centers. Stocks within the computer chip and artificial intelligence sectors also saw gains this week, particularly after OpenAI announced partnerships with South Korean firms for its ambitious $500 billion Stargate project aimed at developing AI infrastructure.
On Friday, stock exchanges in China and South Korea remained closed due to holidays, while Hong Kong's Hang Seng index experienced a slight decline of nearly 0.9%, settling at 27,052.32, as traders opted to secure profits from the previous day's gains. Conversely, Australia’s S&P/ASX 200 advanced by over 0.3% to 8,977.80, while India's BSE Sensex fell by 0.2%. Taiwan’s Taiex, however, saw an increase of 1%.
On Wall Street on Thursday, the S&P 500 rose by 0.1%, marking its all-time high at 6,715.35. The Dow Jones Industrial Average increased by 0.2% to 46,519.72, and the Nasdaq composite climbed 0.4% to 22,844.05. The ongoing government shutdown has delayed the usual weekly jobless claims report, with a monthly report on job creation and destruction across the economy also likely to miss its scheduled release. This situation adds uncertainty to the market, as much of Wall Street's optimism hinges on the idea that the labor market is cooling just enough to persuade the Federal Reserve to continue cutting interest rates without triggering a recession.
Historically, U.S. government shutdowns have not had a significant negative impact on the economy or the stock market, leading to the belief that this shutdown may follow a similar trend, despite Trump’s threats of potential large-scale federal worker layoffs. Consequently, corporate announcements have emerged as the primary driving forces behind trading activity on Thursday.
The excitement surrounding AI and the substantial investments in the sector has played a major role in the stock market's record-breaking run, accompanied by expectations of lower interest rates. However, the dominance and influx of capital into AI stocks have raised concerns about the possibility of a bubble that could lead to investor disappointment. Nevertheless, stocks of major companies in the technology sector performed well, with Advanced Micro Devices rising by 3.5%, Broadcom increasing by 1.4%, and Nvidia's 0.9% rise being a key factor in pushing the S&P 500 higher.
In the early hours of Friday, benchmark U.S. crude prices increased by 36 cents, reaching $60.84 per barrel, while Brent crude, the international standard, also experienced a rise of 36 cents to $64.47 per barrel. The U.S. dollar strengthened against the Japanese yen, rising to 147.64 from 147.26, and the euro edged up to $1.1725 from $1.1717.
