(Oct 6) : Asian stocks were set to open higher after a tech-led rally pushed the S&P 500 index near a record as investors largely shrugged off concerns about bond yields at multi-decade highs. US oil prices extended declines.

Equity-index futures for Japan, South Korea, Australia and Taiwan all pointed to gains. Futures for the Nasdaq 100 rose 0.2% after the underlying contract closed at a record, while the S&P 500 contract edged higher in early Asian trading after a rally in Nvidia Corp. and Microsoft Corp. shares helped it close near an all-time high. 

Government bonds in Australia and New Zealand fell early Tuesday, after longer-dated Treasury yields climbed. The euro fell to its weakest since May on Monday amid mounting political upheaval in Europe and fiscal worries, with a gauge of dollar strength closing marginally higher.

Stock markets have largely looked through the prospect of higher interest rates, elevated energy costs and renewed inflation concerns that have have sent global bond yields soaring. Instead, investors have focused on strong earnings, resilient consumer spending and surging artificial intelligence-related investment to drive benchmarks higher. 

“Relative equity-market calm amid the bond market’s ‘perfect storm’ is understandable, given accelerating economic growth and the AI boom’s rate insensitivity,” said Lisa Shalett at Morgan Stanley Wealth Management.

Still, market breadth remains one of the biggest concerns for investors. The percentage of stocks trading above their 10-, 50- and 200-day moving averages dropped to levels last seen in March.

“We need to see interest rates and oil to come down, but at this point of time it’s not happening and the market internals are getting worse,” said Craig Johnson, chief market technician at Piper Sandler. “That’s going to be a headwind for the market.”

Elsewhere, US oil held a two-day loss and traded below US$90 a barrel after Brent closed around US$100. US President Donald Trump is preparing to ease limits restricting the use of a tax-exempt variety of diesel, his latest bid to pare costs for the essential fuel.  

uploaded by Isabelle Francis