Asian shares mostly rise after Wall Street sets new records

TOKYO -- Asian shares traded mostly higher Tuesday after Wall Street set new records and investor anticipation grew that the U.S. Federal Reserve will announce the first cut of the year on its main interest rate.

Japan's benchmark Nikkei 225 came off a holiday to momentarily reach above 45,000 points a few times during the session, the first ever to happen during regular trading. The benchmark was trading at 44,975.69 in the afternoon, up 0.5% from the previous close. Australia's S&P/ASX 200 edged up 0.3% to 8,875.60. South Korea's Kospi rose 1.2% to 3,448.69.

Hong Kong's Hang Seng reversed earlier declines to gain 0.3% to 26,512.58 and the Shanghai Composite added 0.2% to 3,866.50. U.S. Treasury Secretary Scott Bessent said after weekend trade talks in Spain that a framework deal had been reached between China and the U.S. over the ownership of popular social video platform TikTok.

Bessent said after the latest round of trade talks between the world’s two largest economies concluded in Madrid that U.S. President Donald Trump and Chinese Premier Xi Jinping would speak Friday to possibly finalize the deal. He did not disclose the terms of the deal.

On Wall Street, the S&P 500 climbed 0.5% and topped its prior all-time high, which was set last week. The Dow Jones Industrial Average rose 49 points, or 0.1%, and the Nasdaq composite added 0.9% to its own record.

Tesla helped lead the way and rose 3.6% after Elon Musk bought stock worth roughly $1 billion through a trust. The electric vehicle company’s stock price came into the day with a slight loss for the year so far, and the purchase could be a signal of Musk’s faith in it.

Alphabet was the single strongest force lifting the S&P 500 after gaining 4.5%, which brought the total value for Google’s parent company above $3 trillion. Nvidia, Microsoft and Apple are the only other companies on Wall Street worth that much.

The market’s main event for the week will arrive on Wednesday. That’s when the Federal Reserve will announce its latest decision on interest rates. A rate cut could give a kickstart to the job market, which has been slowing.

Stocks have already run to records on the assumption that a cut is coming on Wednesday, though. Expectations are also high that the Fed will keep lowering rates through the end of this year and into 2026. That creates the possibility for disappointment in the market, which would mean drops for stock prices if the Fed doesn’t end up slashing rates as aggressively as traders expect.

What’s keeping the Fed on guard is a possible jump in inflation because of Trump’s tariffs. That’s because lower interest rates can give inflation more fuel and send it even higher. And inflation has already proven difficult to get under the Fed’s 2% target.

Trump, meanwhile, has pushed angrily for cuts to interest rates. He’s often attacked Powell personally, nicknaming him “Too Late,” and is trying to remove one of the Fed’s governors from its board.

“‘Too Late’ must cut interest rates now, and bigger than he had in mind,” Trump wrote on his social media network on Monday, using his trademark all-caps style.

Nvidia edged down by less than 0.1% after China accused the chip company of violating its antimonopoly laws. Chinese regulators did not mention a punishment for Nvidia in a one-sentence statement on the matter but did say they would carry out “further investigation.”

All told, the S&P 500 rose 30.99 points to 6,615.28. The Dow Jones Industrial Average added 49.23 to 45,883.45, and the Nasdaq composite climbed 207.65 to 22,348.75.

In the bond market Treasury yields eased, continuing their downward run on expectations for cuts to rates by the Fed.

The next economic update will arrive Tuesday, when the U.S. government will say how much shoppers spent at U.S. retailers last month.

The yield on the 10-year Treasury fell to 4.03% from 4.06% late Friday.

In energy trading, benchmark U.S. crude rose 6 cents to $63.36 a barrel. Brent crude, the international standard, gained 4 cents to $67.48 a barrel.

In currency trading, the U.S. dollar edged down to 147.03 Japanese yen from 147.33 yen. The euro cost $1.1783, up from $1.1769.

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AP Business Writer Stan Choe in New York contributed.

Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama