Asia stocks rise on Fed cut hopes, tech rally

August 05, 2025 (MLN): Asia-Pacific markets traded higher on Tuesday, buoyed by optimism around U.S. rate cut prospects and strong earnings from global tech firms, even as geopolitical tensions resurfaced following U.S. President Donald Trump’s renewed tariff threats on India.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.6% in early trade, as CNBC reported.

Japan’s Nikkei rose 0.5%, rebounding after its sharpest drop in two months, supported by data showing a surge in the country’s services activity.

The S&P Global final services PMI for Japan jumped to 53.6 in July, the highest level since February, up from 51.7 in June.

In corporate developments, shares of Mitsubishi Heavy Industries rallied after the company secured a $6.5 billion defense contract from the Australian navy.

Meanwhile, South Korea’s July consumer inflation rose by 2.1% year-on-year, in line with market expectations.

Sentiment in global markets remained upbeat following a positive session on Wall Street, where major indices were lifted by encouraging corporate earnings and growing speculation of a Federal Reserve rate cut in September.

Bets for such a move surged to 94%, up from 63% on July 28, according to CME FedWatch data.

This follows disappointing U.S. jobs data last Friday, which also sparked debate after Trump fired the head of labor statistics behind the report.

Trump’s latest remarks targeting India’s oil trade with Russia have added to geopolitical uncertainties.

On Truth Social, Trump criticized New Delhi for profiting off Russian oil sales, stating, “India is not only buying massive amounts of Russian oil, they are then, for much of the oil purchased, selling it on the open market for big profits.”

He threatened to increase tariffs on Indian exports beyond the 25% level announced last month.

In response, Indian officials rejected the accusations, calling them “unjustified” and affirming that they would safeguard national economic interests.

Oil prices remained subdued as oversupply concerns lingered despite potential disruptions to Russian supply.

Brent crude held steady at $68.76 per barrel, while U.S. crude futures edged down 0.02% to $66.28.

Spot gold was marginally higher at $3,381.4 per ounce.

The dollar slipped 0.1% to 146.96 yen, while the euro remained flat at $1.1572.

The dollar index inched up 0.1%, recovering from a two-day slide.

Tech stocks continued to fuel gains in U.S. markets.

Nvidia, Alphabet, and Meta posted notable advances, and Palantir Technologies raised its revenue forecast for a second time this year, citing strong demand for AI-related services.

Investors now look ahead to upcoming earnings from Walt Disney and Caterpillar.

Meanwhile, futures pointed to a modestly positive open in Europe and the U.S. Euro Stoxx 50 futures were up 0.2%, German DAX futures added 0.3%, and FTSE futures rose 0.4%.

S&P 500 e-minis also climbed 0.2%.

Bitcoin traded near flat at $114,866.06 after a two-day rally, while the market remained focused on inflation trends, earnings, and policy signals from global central banks.

Rodrigo Catril, senior currency strategist at National Australia Bank, noted, “There are signs of weakness in parts of the U.S. economy, that plays to the view that maybe not in September, but certainly this year that the Fed's still on course to ease potentially twice.”

As markets digest mixed signals on the economic and geopolitical front, investor attention remains sharply focused on the U.S. monetary policy path and global trade developments.

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