(Bloomberg) — Asian stocks advanced, as the focus shifted from Middle East tensions to company earnings and economic data for insight into the direction of central bank policy.
Most Read from Bloomberg
Shares in Hong Kong outperformed with the benchmark gaining more than 2%. Gauges across the region recouped some of last week’s slide as traders took comfort in the absence of further escalation from Iran following Israel’s retaliatory strike.
Mainland Chinese shares opened mixed as the country’s lenders kept the loan prime rates steady. Most Asian chip stocks slumped after Nvidia tumbled 10%, the most in four years. Contracts for US equities edged higher after the Nasdaq 100 Index ended Friday with a 2.1% loss.
The dollar was weaker and the yield on 10-year US Treasury yields advanced as haven demand let up slightly. Investors over the world are recalibrating their positions after stronger-than-expected US data forced the Federal Reserve to reset the clock on its first interest rate cut.
“We are seeing a relief rally underway this morning as geopolitical risks subside,” said Kyle Rodda, a senior market analyst at Capital.com in Melbourne. “The move basically squares the ledger now and allows the markets to go back to focus on macroeconomic and corporate fundamentals.”
US growth and the Fed’s preferred measure of inflation are due this week, which will help finesse bets on timing of any rate cuts. Investors must also absorb a hefty slate of Treasuries auctions.
Read More: Fed Resets Clock on Cuts and Questions If Rates Are High Enough
The S&P 500 saw its worst week since March 2023 last week — extending a drawdown from its all-time high to more than 5%. After the gauge’s strongest start to a year since 2019, investors have been increasingly skeptical about how much further the market could go over the near term, even accounting for the continued strength in the economy.
More than half of the “Magnificent Seven” cohort of tech megacaps will report earnings this week — leaving investors wondering whether those firms are going to live up to the…
..