Asian markets mostly climbed higher on Wednesday. Japanese stocks continued to outperform, extending a record-setting rally. The yen weakened further during the session.
Regional Market Performance
Hong Kong's Hang Seng Index traded at 27,037. This marked a gain of 188 points, or 0.7 percent. Japan's Nikkei also inched higher. It jumped 864 points, or 1.6 percent, to reach 54,413.
Shanghai and Shenzhen markets also traded in the green. They were up 1.11 percent and 1.83 percent respectively. Meanwhile, South Korea's Kospi showed a slight decline. It was down 4 points around 9 am Indian Standard Time.
Wall Street's Overnight Retreat
The regional performance followed a softer close on Wall Street overnight. US stocks retreated on Tuesday. The S&P 500 pulled back from a record high.
Losses were led by banking shares. JPMorgan Chase & Co. reported investment-banking fees that fell short of guidance. This dragged the broader sector lower.
Inflation Data and Fed Expectations
The move came despite December inflation data. The figures failed to materially shift expectations. Market participants still believe the Federal Reserve will pause further interest-rate cuts.
A cooler-than-expected reading in the US consumer price index strengthened bond traders' expectations. They now anticipate the Federal Reserve will hold off on rate cuts until mid-year.
Key Events and Risks Ahead
Market participants are now positioning ahead of Wednesday. Attention is focused on a possible US Supreme Court ruling. The ruling concerns President Donald Trump's global tariffs announced in April.
An unfavourable outcome for President Trump could trigger a negative market response. The administration retains alternative legal routes to enforce most of the levies, however.
Bank Earnings in Focus
Investors are also tracking a heavy slate of bank earnings. After JPMorgan reported on Tuesday, several major banks are scheduled for release.
Results from Bank of America Corp., Wells Fargo & Co., Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley are due on Wednesday and Thursday.
Collectively, the group is expected to record its second-highest annual profit on record. Policy changes under the Trump administration have helped this performance.
Commodities Market Movement
In commodities, Brent crude extended gains. It posted its largest four-day rise since June. President Trump intensified rhetoric around Iran, contributing to the movement.
Silver also continued to climb. It stretched its rally to mark the strongest three-day run on record.
