Asian benchmarks traded mostly higher in early Friday trading, mirroring a positive sentiment carried over from a rally on Wall Street, primarily propelled by significant gains in technology stocks. Japan's Nikkei 225 index rose 0.6% in morning trading, while South Korea's Kospi saw a gain of 0.9%. Australia's S&P/ASX 200 experienced a slight dip, trading less than 0.1% lower. Hong Kong's Hang Seng surged 2.1%, and the Shanghai Composite added 0.8%.
Stocks on Wall Street concluded Thursday with gains as a recent surge in bond yields showed signs of easing, coinciding with a strong performance from major technology companies. The S&P 500 climbed 1.1%, the Dow Jones Industrial Average increased by 1.2%, and the Nasdaq composite closed 1.4% higher. Communication services stocks also contributed significantly to the rally, their substantial valuations often influencing broader market movements.
Major technology firms reported notable increases, with Microsoft up 2.7%, Apple gaining 1%, and Meta climbing 3%. Nvidia, a prominent chipmaker, saw its stock rise 1.8% following its announcement to acquire the AI platform Hugging Face for $13 billion.
In energy markets, U.S. crude oil prices edged up by 65 cents to $91.95 a barrel, and Brent crude rose by 47 cents to $95.99 a barrel. These increases come amid a six-month conflict involving the U.S. and Iran, which has intensified and is seen as a primary driver behind the recent surge in energy prices. The Strait of Hormuz, a critical chokepoint for oil imports from the Middle East, remains a point of concern, with Iran reportedly firing on Kuwait in retaliation for earlier U.S. bombardments.
The yield on the 10-year U.S. Treasury note, a key indicator for mortgage rates, decreased to 4.77% from 4.79% on Wednesday. This yield has seen a steady rise throughout the year, starting at 4.20% at the beginning of 2026.
Federal Reserve Governor Christopher Waller's recent remarks have led some investors to anticipate that the Fed might hold off on raising short-term interest rates at its upcoming policy meeting. Waller indicated that he would lean towards keeping the benchmark interest rate unchanged if next week's inflation data shows a cooling trend, but would consider a hike if inflation proves to be hotter than expected.
Market participants are also closely monitoring the Bank of Japan's upcoming policy board meeting, where interest rate decisions will be made. Analysts are considering the possibility of a rate hike by Japan's central bank, with discussions around the extent of such an increase and its potential impact on strengthening the yen.
In currency trading, the U.S. dollar saw a slight decrease against the Japanese yen, trading at 155.78 yen compared to 155.84 yen. The euro remained relatively stable, trading at $1.1633, little changed from its previous level.