Asian markets mostly rose on Tuesday, with Japan's Nikkei 225 leading the way, surging 3.1% to an intraday record of 53,814.79 as trading resumed after a holiday. The rally was buoyed by technology stocks, notably Advantest, which saw an 8.5% jump, while Tokyo Electron and SoftBank Group also posted significant gains of 8.3% and 4.3% respectively.
In addition to the strong performance of Japanese stocks, investors are keenly observing the political landscape, where Prime Minister Sanae Takaichi is rumored to be considering an early election to bolster her mandate for increased government spending.
Hong Kong's Hang Seng Index also experienced an uptick, advancing 1% to 26,877.01. A notable highlight was the debut of GigaDevice Semiconductor, a China-based chip designer, which soared 54% in early trading. Meanwhile, the Shanghai Composite index experienced a slight decline of less than 0.1%, settling at 4,163.84.
South Korea's Kospi index was up 0.6%, reaching a record intraday high of 4,651.67. Australia's S&P/ASX 200 gained 0.8% to close at 8,830.60, while Taiwan's Taiex saw a smaller increase of 0.5%. In contrast, India's Sensex experienced a minor loss, declining 0.3%.
On Wall Street, concerns regarding the Federal Reserve's independence in setting interest rates were offset by investor optimism that President Donald Trump would succeed in persuading the central bank to cut rates more aggressively. Lower interest rates are typically associated with cheaper credit, which can buoy stock prices.
Tensions between Trump and Fed Chair Jerome Powell have escalated after the Department of Justice subpoenaed the Fed, threatening a criminal indictment over Powell's testimony concerning renovations at the central bank's headquarters. Despite these tensions, the market remained resilient. On Monday, the S&P 500 index gained almost 0.2%, reaching a new record of 6,977.27. The Dow Jones Industrial Average also rose by 0.2% to set its record at 49,590.20, while the Nasdaq composite increased by 0.3% to 23,733.90.
Trump has repeatedly called for the Fed to reduce interest rates further in order to lower borrowing costs for consumers and businesses. The White House clarified that Trump did not instruct the Justice Department to investigate Powell, despite claims during the ongoing debates.
In the tech sector, Alphabet, the parent company of Google, gained 1%, pushing its market value to over $4 trillion after Apple announced that it would utilize Google's Gemini to enhance its virtual assistant, Siri, as part of a new partnership.
On the other hand, credit card companies faced losses following Trump's proposal to place a one-year, 10% cap on credit card interest rates, which could significantly impact their profitability. Shares of Synchrony Financial, Capital One Financial, and American Express recorded declines of 8.4%, 6.4%, and 4.3% respectively.
In commodities trading, the price of gold dipped by 0.2%, while silver rose by 0.8%. The U.S. dollar strengthened against the yen, increasing to 158.72, up from 158.07, and trading near its highest level in a year. Conversely, the euro slipped to $1.1666 from its previous value of $1.1667.
