Asian stock markets climbed on Thursday, led by strong gains in technology shares. At the same time, gold hovered near a record high and the U.S. dollar stayed weak, following disappointing labor market data that boosted expectations of Federal Reserve interest rate cuts.
The U.S. government shutdown means the release of monthly payroll data on Friday is unlikely. However, overnight the ADP private employment report revealed that the U.S. economy unexpectedly lost jobs in September. The previous month’s figures were also revised lower.
This weak jobs data has strengthened market expectations for Fed rate cuts. Traders are now betting on quarter-point reductions at both of the remaining policy meetings this year.
Wall Street welcomed the outlook for easier monetary policy, pushing indexes to fresh record highs on Wednesday. The Philadelphia Semiconductor Index gained more than 2%, with chip stocks driving the rally.
Japan’s Nikkei rose over 1%, despite pressure from a stronger yen. Taiwan’s technology-focused stock market jumped 1.8%, while South Korea’s KOSPI surged 2.8% after chip giants Samsung and SK Hynix signed partnerships to supply OpenAI data centers. Hong Kong’s Hang Seng index added 1.6%. In Europe, STOXX 50 futures pointed 0.5% higher.
Kyle Rodda, analyst at Capital.com, said the ADP data showed the U.S. economy “is in almost dire need for further policy support.” He noted that markets are now pricing in a much higher chance of Fed rate cuts in both October and December.
Markets also reacted calmly to the U.S. government shutdown. Rodda added that historically shutdowns have had little long-term impact, but delays in critical economic data could increase uncertainty and market volatility.
The shutdown began Wednesday as Congress and the White House failed to agree on a funding plan. The stalemate is expected to be lengthy and politically charged.
Meanwhile, gold surged to a new all-time high of $3,895.09 overnight before easing slightly to $3,866. Analysts say momentum remains with the bulls, supported by strong fundamentals in precious metals.
U.S. Treasuries also gained, pushing yields sharply lower. The two-year Treasury yield dropped to a two-week low of 3.531% during Asian trading hours on Thursday.
The U.S. dollar index hovered near a one-week low at 97.731, after sliding to 97.459 overnight. The dollar was steady at 147.21 yen, while the euro edged up to $1.1734 and sterling dipped slightly to $1.3470.
In commodities, oil prices rose after three days of declines, supported by prospects of tighter sanctions on Russian crude. Brent crude futures gained 0.7% to $65.78 per barrel, while U.S. West Texas Intermediate crude also rose 0.7% to $62.20 per barrel.
