BY COMFORT OGBONNA
Global stocks moved higher Monday as investors began a busy week of economic updates in the United States, with Japanese shares leading gains amid renewed interest in technology and artificial intelligence-related companies.
Japan’s benchmark Nikkei 225 rose 2.4% to close at 69,946.86 after briefly moving above the 70,000 mark for the first time in three months. The advance reflected continued investor appetite for technology companies and expectations that easing inflation pressures could reduce the likelihood of further interest-rate increases.
In Europe, however, markets were mixed. France’s CAC 40 fell 1.1% in early trading to 7,813.40, while Germany’s DAX was nearly unchanged, edging up less than 0.1% to 25,242.92. Britain’s FTSE 100 gained 0.5% to reach 10,511.80.
Futures for the S&P 500 and Dow Jones Industrial Average were both down about 0.1%, suggesting U.S. markets could open slightly lower after ending the previous week with gains.
Elsewhere in Asia, Australia’s S&P/ASX 200 was little changed, edging up less than 0.1% to 8,686.40. Hong Kong’s Hang Seng Index rose 0.3% to 24,040.34. Markets in Shanghai and South Korea were closed for national holidays.
Technology and artificial intelligence-related companies remained a major source of investor interest. Tokyo Electron, a major supplier of semiconductor manufacturing equipment, climbed 5.5% in Tokyo, while shares of SoftBank Group rose 3%.
Taiwan Semiconductor Manufacturing Co., one of the world’s largest contract chipmakers, gained 3%, adding to the momentum in technology stocks.
The gains came as investors prepared for a series of U.S. economic reports that could provide further clues about the direction of interest rates and the strength of the world’s largest economy.
Data due during the week will include information on the U.S. services sector, unemployment and consumer sentiment. Investors are closely watching the reports for evidence of whether economic activity is slowing and whether inflation pressures are continuing to ease.
The latest labor-market figures have already influenced expectations about monetary policy. U.S. employers added a net 29,000 jobs to their payrolls last month, well below economists’ expectations and significantly slower than the 133,000 jobs added in August.
The weaker hiring figures helped ease some concerns that a strong labor market could keep inflation elevated and encourage policymakers to maintain or increase interest rates.
Investors interpreted the data as reducing the likelihood of another increase in the Federal Reserve’s benchmark interest rate, providing some support for stocks.
The Federal Reserve has been closely monitoring inflation and employment as it determines how much further monetary policy needs to tighten. Higher interest rates can weigh on economic growth and stock valuations, while expectations for lower or stable borrowing costs can encourage investors to take on more risk.
Wall Street ended Friday’s session higher. The S&P 500 gained 0.7%, while the Dow Jones Industrial Average rose 0.5%. The Nasdaq composite, which has a large concentration of technology companies, advanced 1.2%.
The recent gains have come despite continued uncertainty surrounding inflation, interest rates and geopolitical developments. Investors remain particularly sensitive to economic reports that could alter expectations for the Federal Reserve’s next policy decisions.
Energy markets remained volatile as traders continued to assess the impact of the conflict involving Iran on global oil supplies and the broader economy.
U.S. benchmark crude fell 1.7% to $89.57 a barrel, while Brent crude, the international benchmark, declined 1.3% to $100.95 a barrel.
Oil prices have experienced sharp swings as markets attempt to determine how the conflict could affect production, exports and shipping routes across the Middle East. Any disruption to major energy infrastructure or transportation routes could tighten global supplies and push prices higher, while increased exports or strategic stock releases could have the opposite effect.
The movement in oil prices is also important for investors because sustained increases in energy costs could add to inflationary pressure, potentially complicating central banks’ efforts to stabilize prices without significantly slowing economic activity.
For now, investors are balancing several competing factors, including signs of easing inflation, a weaker labor market, strong demand for technology stocks and continuing geopolitical risks.
The week’s economic data could provide a clearer picture of whether the U.S. economy is losing momentum and how that might influence interest-rate expectations. Until those reports arrive, market gains are likely to remain measured as investors assess the competing signals from the global economy.
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