Asian markets were little changed in early trading Friday, as investors took a wait-and-see approach after Wall Street rallied late to snap a two-day losing streak.
The major U.S. indexes were down around 1% at one point early Thursday, but pulled out of their respective dives to end the day in positive territory. The Nasdaq Composite closed up 1.1% for its biggest intra-day turnaround since April 2018.
As recent economic data has raised fears of recession, investors apparently were betting on another interest-rate cut by the Fed later this month. The will be closely watching Friday’s Labor Department jobs report for September. Economists polled by MarketWatch predict the U.S. added 147,000 new jobs last month.
“Increased hopes for further interest rate cuts by the Fed look to help stabilize markets into the end of the week,” Jingyi Pan of IG said in a report.
Japan’s Nikkei NIK, -0.03% was about flat and Hong Kong’s Hang Seng Index HSI, -0.50% slipped 0.5%. South Korea’s Kospi 180721, -0.08% was about flat, while benchmark indexes in Taiwan Y9999, -0.09% , Singapore STI, -0.40% and Indonesia JAKIDX, +0.46% were mixed. Australia’s S&P/ASX 200 XJO, +0.29% rose 0.2%. Markets in mainland China remained closed for a holiday.
Among individual stocks, Central Japan Railway 9022, +3.07% and SoftBank 9984, +1.43% gained in Tokyo trading, while Kobe Steel 5406, -1.91% and Fast Retailing 9983, -1.31% declined. In Hong Kong, property developer Country Garden 2007, +3.17% rose while Sands China 1928, -1.93% and China Mobile 941, -0.76% fell. Samsung Electronics 005930, +1.26% and chip maker SK Hynix 000660, +1.51% advanced in South Korea. In Australia, Virgin Australia VAH, +1.56% and Qantas Airways QAN, +1.43% rose.
On Wall Street, the S&P500 index SPX, +0.80% rose 0.8% to 2,910.63. The Dow Jones Industrial Average DJIA, +0.47% gained 0.5% to 26,201.04. The Nasdaq COMP, +1.12% , which is heavily weighted with technology stocks, climbed 1.1% to 7,872.26.
Investors are wrestling with uncertainty about the economy and the impact of a U.S.-Chinese tariff war.
President Donald Trump urged China on Thursday to investigate Joe Biden and his son, Hunter, spurring concerns by critics that he may take a possible Chinese response into consideration when negotiating an end to the trade war.
Others placed hope that a trade deal would come out of self-preservation.
“The market continues to hope for the best while preparing for the worst that, at minimum, the economic carnage inflicted by the U.S.-China trade war will be enough to bring to fruition a partial trade deal,” Stephen Innes, Asia-Pacific market strategist at AxiTrader, wrote in a note. “Hope springs eternal.”
Adding to investors’ unease, the Institute for Supply Management, an association of purchasing managers, said its non-manufacturing index sank to 52.6 from 56.4 in August. Readings above 50 signal growth, but September’s figures are the lowest since August 2016.
Services account for more than two-thirds of the U.S. economy and have been resilient in the face of the tariff war that is squeezing manufacturers.
The Fed has lowered rates by a quarter-percentage point twice this year in a bid to shield the economy from slowing growth abroad and the effects of the trade war. Investors put the odds the Fed will cut rates again at the end of this month at above 88%, according to the CME Group.
Benchmark U.S. crude CLX19, +0.36% gained 21 cents to $52.66 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost 19 cents on Thursday to close at $52.45. Brent crude BRNZ19, +0.35% , used to price international oils, advanced 22 cents to $57.93 per barrel in London. It gained 2 cents the previous session to $57.71.
The dollar USDJPY, -0.13% declined to 106.77 yen from Thursday’s 106.91 yen.