S&P 500 futures rose as CoreWeave's results eased AI bubble fears, while a hot US inflation print pushed global bond yields higher. The data raised the risk of a half-point Fed rate hike in December.
Stocks in Asia rallied on Wednesday as CoreWeave results waved away AI bubble fears, while global bond yields jumped and the dollar held firm. A hot US inflation print drove the bond move and raised the risk of a half-point rate hike next month.
S&P 500 futures rose 0.6% and Nasdaq futures gained 1.4%, helped by an 8% after-hours jump in CoreWeave. The AI infrastructure company, backed by Nvidia, said it would be profitable in the first half of 2028, as third-quarter revenue soared.
Asia-Pacific shares extend gains
That lifted sentiment across Asia. MSCI's broadest index of Asia-Pacific shares jumped 1.9% for a third straight day of gains, with South Korea up 2.6% and Taiwan up 3%. Japan's Nikkei climbed 1.5%.
Nvidia shares also steadied after two days of steep losses that wiped $430 billion off its market value. Meanwhile, SoftBank Group recouped earlier losses to be flat on the day after a net loss of $7 billion in the second quarter.
Hot inflation puts a 50-basis-point hike in play
Core US inflation ran at a monthly rate of 0.3% in October, above the forecast 0.2%. Before the data landed, Fed Governor Christopher Waller said a core reading of 0.3% would prompt him to consider a 50-basis-point hike in December.
Other Fed officials also sounded hawkish. Dallas Fed President Lorie Logan said two more rate rises were needed, possibly rapidly, while Philadelphia Fed President Anna Paulson called for gradual hikes. As a result, Fed funds futures show a quarter-point move in December as essentially locked in, with a 10% risk of a 50 bp rise.
Yields jump and the dollar firms
Two-year Treasury yields surged 18 basis points overnight. In Asia, Japan's 10-year government bond yield rose 11 bps to 2.795%, and Australia's rose 6 bps to 5.05%.
The repricing lifted the dollar, which gained 0.5% overnight against its major peers. The stronger dollar hit gold, which fell 2.6% overnight before edging up 0.8% on Wednesday to $4,061.56 an ounce.
Source: Reuters via Investing.com
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