Mixed Asian Markets Followed by Gains in New York Futures Amid Global Economic Shifts

Asian markets showed mixed trends on the morning of the report, with initial gains losing momentum throughout the day. South Korea's KOSPI index improved from an early 3% drop to a 1.7% decline. A major event this week is the planned $29 billion NASDAQ ADR offering by SK Hynix, which would be the largest U.S. IPO by a foreign company, enhancing American investor access to the AI memory chip leader and potentially narrowing its valuation gap with Micron. In Japan, the Nikkei fell 1%, while Shanghai and Hong Kong markets rose slightly by 0.1% and 0.9%, respectively. U.S. futures indicated gains with the NASDAQ up 0.8% and the S&P 500 up 0.4%. Last week, the Dow Jones surged nearly 2% to approach 53,000 points, a record high, while the S&P 500 and NASDAQ rose 1.8% and 2.1%. Despite this, semiconductor stocks weakened, with investors rotating funds into other sectors like industrials, healthcare, and consumer goods. The SOXX ETF fell 3.2% for a second consecutive week.

This sector rotation reflects a broader market rally beyond tech giants and AI, supported by easing inflation pressures due to lower oil prices following a U.S.-Iran ceasefire and moderate employment data suggesting potential interest rate cuts without recession fears. In U.S. government bonds, yields remained complex: 10-year yields held near 4.5%, and 2-year yields around 4.1%, indicating expectations for some rate cuts but no rapid monetary easing. Fiscal concerns, including a large U.S. deficit and increased bond issuance, are pressuring long-term yields upward despite potential Federal Reserve rate reductions.

In commodities and currencies, the U.S. dollar experienced its sharpest weekly drop in 12 weeks after weak U.S. employment data reduced rate hike expectations. The dollar index fell 0.5%, while the Japanese yen strengthened 0.7% against the dollar but remained near a 40-year low at 161.8 yen per dollar, raising concerns about possible Japanese intervention. Brent crude oil prices stabilized near $72 per barrel, with WTI crude falling nearly 1% to $68.8, marking a fourth consecutive week of declines. Citi Bank analysts forecast Brent prices could drop to around $60 by year-end as disruptions in the Strait of Hormuz ease and supply-demand fundamentals regain prominence. Meanwhile, Bitcoin rebounded from a low of about $58,000 to above $62,000, buoyed by weaker U.S. jobs data and reduced rate hike expectations, despite the dampening effect of high interest rates on non-yielding assets like cryptocurrencies.