Stock Market Today: Dow, S&P Live Updates for September 12

Stocks in Asia rose Thursday for the first time this week, as a tech-fueled rally on Wall Street spread across the region.

Risk appetite returned as US inflation data for August supported bets for a Federal Reserve rate cut next week. Benchmarks in Japan, South Korea and Taiwan advanced, pushing the MSCI Asia-Pacific Index to the biggest gain in almost a month.

“The tech rebound and increased appetite for risk-taking are enjoyed by the Asian markets as well,” said Jun Rong Yeap, market strategist at IG Asia. “Rate expectations are still split on what will come beyond September, so that may still see some caution creeping back in as the Fed meeting nears,” he said.

Traders have swung between optimism that the Fed will guide the US economy to a soft landing and fear that the central bank has left it too late to cut rates. While swaps have now priced in a 25 basis point rate reduction next week, debate over the path for further reductions continues, and some investors say markets have overpriced expectations.

In Japan, the Nikkei index halted a seven-day losing streak as the US inflation print pulled the yen down from its strongest level against the dollar since December. A region-wide gauge of tech stocks rose more than 3% after Nvidia Corp. jumped 8.2% overnight, while Taiwan Semiconductor Manufacturing Co. was among top gainers on the regional index. Chinese stocks were mixed.

The so-called core consumer price index — which excludes food and energy costs — increased 0.3% from July, the most in four months, and 3.2% from a year ago, Bureau of Labor Statistics figures showed Wednesday. The three-month annualized rate advanced 2.1%, picking up from 1.6% in July, according to Bloomberg calculations.

“Stocks will probably rally more with a 25 bps cut than 50” because the latter will signal weaker growth, Timothy Moe, chief Asia Pacific equity strategist at Goldman Sachs Group Inc., said on Bloomberg TV. “Bid-ask here is a moderate degree of rate cuts while growth is still decent in the US, which is a very good backdrop for equity markets,” he said.

An index of the dollar was steady after falling Wednesday. Oil held gains from Wednesday as Hurricane Francine ripped through key oil-producing zones in the Gulf of Mexico, prompting traders to cover bearish bets.

Bank of Japan policy board member Naoki Tamura sent the yen slightly upward with comments about lifting its benchmark rate to at least 1% by the end of its projection period. On Wednesday, another board member, Junko Nakagawa, said the central bank will continue to adjust policy provided the economy performs in line with projections in comments that sent the yen higher.

Japan’s producer price index rose less than expected in August. Other data set for release in Asia includes producer prices for Hong Kong, inflation and industrial production in India and a rate decision in Pakistan. Investors are also showing new interest in Southeast Asian equities, which have emerged as a favored trade among fund managers for the Fed’s policy pivot.

Whether the economy is entering a soft landing that only requires a series of modest rate cuts, or heading for a harder landing at some stage in the next year is the biggest conundrum for investors. Currently, Fed swaps are pricing in over 140 basis points of rate cuts by the Jan. 29 rate decision, equivalent to roughly two half-point moves over the next four gatherings barring no intra-meeting event.

“The firmer-than-expected core inflation print will make it harder for Jerome Powell to deliver a 50 basis-point cut in September,” said Krishna Guha at Evercore. “We continue to think a starter 50 basis-point cut is the right play and might even now win out. But the odds have moved against this, and risks to markets and the soft landing are higher as a result.”

Guha noted that if the Fed doesn’t cut rates by 50 basis points next week, it will possibly do that in November.

Treasuries were steady. Australian and New Zealand yields were slightly higher.

In corporate news, OpenAI is in talks to raise $6.5 billion from investors at a valuation of $150 billion, according to people familiar with the situation. Nvidia Corp. Chief Executive Officer Jensen Huang said the limited supply of their products has frustrated some customers and raised tensions.

Alimentation Couche-Tard Inc. is discussing improving its takeover proposal for Seven & i Holdings Co. with the goal of convincing the Japanese convenience store operator to start engaging in discussions, people with knowledge of the matter said.

Some of the main moves in markets:

This story was produced with the assistance of Bloomberg Automation.