A woman wearing a face mask walks past a bank’s electronic board showing the Hong Kong share index in Hong Kong, Monday, Aug. 30, 2021. Asian shares were mostly higher Monday, as investors interpreted comments from the head of the U.S. Federal Reserve as signaling low interest rates were here to stay for some time. (AP Photo/Kin Cheung)
Stocks are edging higher on Wall Street in early trading Monday, keeping major indexes near the record highs they set last week. Big Tech companies had some of the strongest gains in the early going. The S&P 500 was up 0.1% and the tech-heavy Nasdaq was up 0.4%. The Dow Jones Industrial Average was down slightly. Energy prices were mixed after shooting higher last week as Hurricane Ida headed for the Gulf Coast. Affirm soared 42% after the payments company announced a deal last week with Amazon to offer shoppers a buy-now-pay-later option that doesn’t involve credit cards.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
TOKYO (AP) — Global shares were higher Monday, as investors interpreted comments from the head of the U.S. Federal Reserve as signaling low interest rates were here to stay for some time.
France’s CAC 40 rose less than 0.1% in early trading to 6,684.18, while Germany’s DAX edged up 0.1% to 15,870.46. Britain’s FTSE 100 gained 0.3% to 7,148.01. U.S. shares were set to drift higher with Dow futures up nearly 0.1% at 35,420.00. S&P 500 futures gained 0.1% to 4,508.75.
Japan’s benchmark Nikkei 225 edged up 0.5% to close at 27,789.29. Australia’s S&P/ASX 200 rose 0.2% to 7,504.50. South Korea’s Kospi gained 0.3% to 3,144.19. Hong Kong’s Hang Seng added 0.5% to 25,539.54, while the Shanghai Composite stood at 3,528.15, up 0.2%.
Regional investors are also looking ahead to data expected to be released Tuesday on China’s manufacturing sector.
The rally in Asia paralleled the rise that ended the previous week on Wall Street. The speech by Fed Chair Jerome Powell was key, as U.S. stocks have set record after record this year, in large part because of the Fed’s massive efforts to prop up the economy and financial markets. The gains had been getting increasingly tentative as markets began to look toward a possible end of the Fed’s assistance.
Last week, Powell noted past mistakes where policy makers made premature moves in the face of seemingly high inflation. He made clear a slowing of the Fed’s bond purchases doesn’t mean a rise in short-term rates is imminent. That would require the job market and inflation to hurdle “substantially more stringent” tests.
“We have much ground to cover to reach maximum employment,” Powell said.
One problem Powell noted was the delta variant of the coronavirus, which remains a global concern. The delta variant is behind the recent surge in COVID-19 infections in Asia, where the vaccine rollout has been slower than parts of the U.S. and Europe.
“With the spread of the delta variant still rife and the vaccination drive slow, Singapore being the exception, the path out of the pandemic is unpredictable, fraught with setbacks and periodic lock downs,” said Venkateswaran Lavanya at Mizuho Bank in Singapore.
The delta variant has already slowed some economic activity. In the U.S., a report on Friday showed that consumer spending in the country rose 0.3% in July from June, a sharp slowdown from the prior month’s 1.1% jump. That’s a big deal when consumer spending is the driving force of the U.S. economy, and its growth slowed even though income growth for Americans accelerated to 1.1% last month.
In energy trading, benchmark U.S. crude lost 68 cents to $68.06 a barrel. Brent crude, the international standard, fell 26 cents to $72.44 a barrel.
In currency trading, the U.S. dollar inched up to 109.85 Japanese yen from 109.84 yen. The euro cost $1.1803, down from $1.1792.
AP Business Writer Stan Choe contributed.
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