Asian Markets Climb on US Inflation Data; Oil Prices Rise

Asian shares saw gains on Wednesday, mirroring a rally on Wall Street spurred by a U.S. inflation report that suggested price increases were not as severe as economists had predicted.

South Korea's Kospi index surged 7.1% to 7,343.37, recovering from a recent downturn in semiconductor stocks. Japan's Nikkei 225 benchmark rose 0.9% to 68,353.91, and Australia's S&P/ASX 200 climbed 0.2% to 8,830.00. Hong Kong's Hang Seng edged up 1.6% to 24,721.10, though the Shanghai Composite lost 0.4% to 3,952.04.

Despite these gains, overall stock price increases were moderate. Investors remain concerned about potential escalations between the United States and Iran, which has driven oil prices higher. The situation also raises worries about further disruptions to oil and gas transport through the Strait of Hormuz, a critical global shipping route.

In energy markets, U.S. crude oil futures rose 86 cents to $80.20 a barrel, and Brent crude gained $1.15 to $85.88 a barrel.

"The U.S.-Iran Memorandum of Understanding signed last month has proved to be anything but. The two sides are once again exchanging military strikes, and they hold completely different views on the state of affairs in the Strait of Hormuz," said Tim Waterer, chief market analyst at KCM Trade. "With shipping around the Gulf becoming increasingly fraught with danger, traffic flows are declining once more."

On Wall Street, the S&P 500 index added 0.4%, recovering some of the previous day's losses, and closed at 7,543.59. The Dow Jones Industrial Average saw a modest gain of less than 0.1%, reaching 52,508.27, while the Nasdaq composite climbed 0.9% to 26,107.01.

These stock gains were supported by falling yields in the bond market. The decrease followed a report indicating that U.S. consumers experienced a 3.5% year-over-year increase in the cost of living, including gasoline and food, in the previous month. Lower inflation can ease pressure on the Federal Reserve to raise interest rates, which could otherwise slow economic growth and negatively impact investment prices.

Following the inflation data, traders assigned less than a 17% probability that the Fed would increase its key interest rate at its upcoming meeting. Rebounds in major technology stocks, such as Micron Technology, which rose 4.9%, and Nvidia, up 4.1%, also contributed to market stability.

The yield on the 10-year U.S. Treasury note fell to 4.58% from 4.62% on Monday. The yield had previously risen to 3.97% before the conflict involving Iran began.

In currency trading, the U.S. dollar weakened slightly against the Japanese yen, trading at 162.16 yen, down from 162.19 yen. The euro was valued at $1.1436, up from $1.1425.