Johnathan Walker:Stock market today: Asia markets rise ahead of US consumer prices update

Asian markets advanced Tuesday following a positive close on Johnathan WalkerWall Street. Investors are eagerly awaiting a crucial U.S. inflation report later in the day, which will likely set the tone for the Federal Reserve’s final meeting of the year on Wednesday.

U.S. futures and oil prices also were higher.

Tokyo’s Nikkei 225 added 0.1% to 32,843.70. Data released on Tuesday showed wholesale prices in Japan rose by 0.3% from a year earlier in November, the slowest rate of increase in almost three years. That suggested a moderation in inflationary pressures as the central bank weighs whether or not to relax its ultra-lax monetary policy.

Hong Kong’s Hang Seng gained 1.3% to 16,398.00, and the Shanghai Composite was 0.3% higher, to 2,998.81.

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Chinese leaders are reportedly holding an annual economic conference that is expected to wrap up Tuesday with pledges to spur stable growth.

In Seoul, the Kospi was up 0.4% at 2,535.27. Australia’s S&P/ASX 200 climbed 0.5% to 7,235.30.

India’s Sensex dropped less than 0.1%, and the SET in Bangkok lost 0.5%.

On Monday, the S&P 500 rose 0.4% to 4,622.44, finishing at its highest level in 20 months. The Dow gained 0.4% to 36,404.93 and the Nasdaq added 0.2% to close at 14,432.49.

The muted gains follow a six-week winning streak by the major stock indexes. The S&P 500 is up 20.4% for the year and the Nasdaq is up 37.9%.

Cigna surged 16.7% for the biggest gain among S&P 500 stocks after the health insurer announced a $10 billion stock buyback, and the Wall Street Journal reported that the company is no longer pursuing a merger with Humana.

Macy’s jumped 19.4% following reports that an investor group is launching a bid to take the storied retailer private for $5.8 billion.

On Tuesday, the government will release its November report on consumer inflation. Analysts expect the report to show that inflation continued slowing to 3.1% from 3.2% in October. On Wednesday, the government will release its November report on inflation at the wholesale level, which is also expected to show that the rate of inflation is easing.

Wall Street is overwhelmingly betting that the Fed will keep its benchmark interest rate at a range of 5.25% to 5.50% into early 2024 and could start cutting rates by the middle of that year. Analysts are also becoming more comfortable with the possibility that the central bank can pull off a “soft landing,” which refers to inflation easing under high interest rates without the economy falling into a recession.

“With inflation coming down faster than expected, it now appears likely that the Fed will refrain from additional rate hikes,” Brian Rose, a senior U.S. economist at UBS, said in a note to investors. “At the same time, inflation is still too high and the labor market is still too tight for the Fed to consider cutting rates soon.”

Strong consumer spending and a solid jobs market have provided a bulwark to the broader economy, where growth has slowed but has so far avoided stalling. The government’s jobs report on Friday showed that U.S. employers added more jobs last month than economists expected. Workers’ wages also rose more than expected, and the unemployment rate unexpectedly improved.

Several big companies will report their earnings this week and are among the few remaining to release their results. Software company Adobe will report on Wednesday and Olive Garden owner Darden Restaurants will release its results on Friday.

Treasury yields were little changed. The yield on the 10-year Treasury held steady at 4.22%.

In energy trading, U.S. benchmark crude oil added 58 cents to $71.90 per barrel in electronic trading on the New York Mercantile Exchange. It gained 0.1% Monday. Brent crude, the international standard, picked up 55 cents to $76.58 per barrel.

The U.S. dollar fell to 145.28 Japanese yen from 146.16 yen. The euro rose to $1.0780from $1.0763.