Asian Shares Rise as Wall Street Hits Records, Investors Eye Fed Rate Move

Asian stock markets traded mostly higher Tuesday after Wall Street set fresh records and investors positioned for what many expect to be the Federal Reserve’s first interest-rate cut of the year.

Japan’s benchmark Nikkei 225 briefly traded above 45,000 during regular hours for the first time before settling at 44,975.69, up 0.5% from the previous close. Other regional bourses also advanced: Australia’s S&P/ASX 200 rose 0.3% to 8,875.60, South Korea’s Kospi gained 1.2% to 3,448.69, Hong Kong’s Hang Seng recovered from earlier losses to close at 26,512.58, up 0.3%, and the Shanghai Composite added 0.2% to 3,866.50.

U.S. equities provided momentum, with the S&P 500 climbing 0.5% to a new intraday high and topping its prior all-time peak. The Nasdaq composite rose 0.9% to another record while the Dow Jones Industrial Average added 49.23 points to 45,883.45. Technology names played a prominent role: Alphabet jumped 4.5%, pushing the parent of Google above a $3 trillion valuation, and Tesla rose 3.6% after Chief Executive Elon Musk bought roughly $1 billion of the company’s stock through a trust.

Market attention is concentrated on the Federal Reserve’s policy announcement slated for Wednesday. Traders widely expect the central bank to begin lowering its benchmark interest rate, a move that has been priced into markets and helped push equities to record levels. Bond markets reflected those expectations; the yield on the 10-year U.S. Treasury eased to 4.03% from 4.06% late Friday.

The prospect of rate cuts has boosted risk assets but also left markets vulnerable to disappointment if the Fed moves more cautiously than investors anticipate. A quicker path of easing could support the job market, which has shown signs of slowing, while unexpectedly high inflation could keep the Fed on guard.

U.S. Treasury Secretary Scott Bessent said after trade talks in Spain that negotiators had reached a framework agreement with China on ownership terms for the short-form video platform TikTok, and that U.S. President Donald Trump and Chinese Premier Xi Jinping were expected to speak Friday to possibly finalize the deal. Bessent did not disclose terms.

In other crosscurrents, Chinese regulators said they would conduct “further investigation” into Nvidia over alleged antitrust violations, though they did not announce any penalties. Nvidia’s shares edged down by less than 0.1% on the report.

Energy and currency markets were relatively subdued. Benchmark U.S. crude rose 6 cents to $63.36 a barrel while Brent crude gained 4 cents to $67.48 a barrel. The U.S. dollar traded at 147.03 Japanese yen, slightly lower than late Friday, and the euro was at $1.1783.

Economic data and corporate news will continue to shape moves in the coming days. U.S. retail spending figures due Tuesday and the Fed’s rate decision on Wednesday are the next major catalysts. Political pressure on the Fed has also intensified: President Trump has publicly urged the central bank to cut rates and criticized Chair Jerome Powell, while seeking to remove a governor from the Fed’s board.

Traders and policymakers now face a balancing act between delivering policy that supports a slowing labor market and guarding against inflationary pressures that could be amplified by lower interest rates. For markets that have rallied in anticipation of easier policy, the Fed’s statement and guidance on the path of future cuts will be crucial in determining whether recent gains can be sustained.