ASX expected to open higher as technology stocks drive Wall Street’s rally

“We would say it’s 50 percent at best, possibly lower,” Hoxha said.

She said there was still a risk that the Fed would have to take a firmer stance on interest rates than markets are expecting if US jobs remain tight. This gives them pause as stock and bond prices are soaring around the world.

“It feels like the market wants to pick pennies in front of a steamroller,” she said.

Thursday’s rally swept across the Atlantic, where markets rose after central banks for Europe and the UK also hiked interest rates to quell inflation.

The European Central Bank raised interest rates by 0.50 percentage points and announced another interest rate next month. The Bank of England also raised interest rates by half a percentage point and said it saw signs that inflation had turned the corner but stressed it was too early to declare victory over inflation.

European stocks rallied, with Germany’s DAX returning 2.2 percent. The FTSE 100 in London rose 0.8 percent.

Moves in Asia were more modest, with Hong Kong’s Hang Seng slipping 0.5 percent and Japan’s Nikkei 225 gaining 0.2 percent.

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The next big event for Wall Street will be a series of earnings reports from big tech companies coming out after Thursday’s close, including Apple, Amazon and Google’s parent Alphabet. Each rose more than 3 percent. Because these stocks are the largest by value, their movements have a greater impact on the S&P 500 and other indices.

This is followed by Friday’s jobs report, in which economists expect hiring numbers to slow. The labor market has remained broadly resilient, even in the face of the Fed’s rapid rate hikes over the past year.

Big tech companies have recently announced high-profile layoffs, but a report on Thursday suggested job cuts are not as widespread. Fewer workers filed for unemployment benefits than expected last week, and the number fell to its lowest level since April.

Treasury yields fell further on Thursday, indicative of expectations of a looser Fed. The yield on the 10-year Treasury bond, which helps set interest rates on mortgages and other major loans, fell to 3.36 percent from 3.42 percent late Wednesday. The two-year yield, which is moving closer to the Fed’s expectations, fell to 4.07 percent from 4.10 percent.

AP

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