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US and European stocks followed Asian markets higher on Monday, as traders assessed stimulus measures from Beijing and looked ahead to US inflation and jobs data.
Wall Street’s S&P 500 closed 0.6 per cent higher, while the technology-heavy Nasdaq Composite gauge added 0.8 per cent.
3M was among the biggest gainers, adding 5.2 per cent following reports it is close to finalising a $6bn settlement over legal claims that earplugs supplied to US military personnel failed to protect from hearing loss.
US-listed Chinese tech companies also contributed to the stock market advances, with JD.com and Baidu both adding 2.6 per cent.
Those moves came after Beijing cut a levy on share trading for the first time since the 2008 financial crisis. China’s ministry of finance introduced additional measures to support the country’s struggling market on Sunday, saying it would halve the stamp duty on stock trading in order to boost investor confidence.
The announcement marks the latest in a number of attempts by China’s top officials to provide stimulus to the world’s second-largest economy, which has struggled to regain momentum after three years of severe pandemic restrictions.
In Europe, the regional Stoxx 600 gauge closed 0.9 per cent higher, following two successive days of losses. Tech stocks led the gains, with the Stoxx 600 Technology index rising 1.7 per cent. Markets in the UK were closed for a public holiday.
European luxury goods stocks, which are closely linked to China’s consumer spending expectations, also advanced, with heavyweights Hermès and LVMH gaining 1.8 per cent and 1.7 per cent, respectively.
China’s benchmark CSI 300 index of Shanghai- and Shenzhen-listed stocks closed 1.2 per cent higher, having climbed as much as 5.5 per cent earlier in the session. Hong Kong’s Hang Seng index finished 1 per cent higher.
Traders were also on Monday looking ahead to US labour market data due at the end of the week, which will be scrutinised for clues about the future path of interest rate rises.
Economists polled by Reuters predict that non-farm payrolls grew by 170,000 in August, compared with 187,000 in July.
The report “is expected to show headline jobs growth slowing, but not by enough to justify a shift in the [Federal Reserve’s] ‘higher-for-longer’ stance”, wrote Karl Schamotta, chief market strategist at Corpay.
Fed chair Jay Powell said on Friday at the Jackson Hole economic conference that inflation “remains too high”, raising the prospect of more rate rises if price pressures persist.
The US central bank last raised the benchmark federal funds rate to a 22-year high in July, leaving the door open for additional tightening if rate-setters deem it necessary.
The dollar slipped 0.1 per cent lower against a basket of six other currencies.
Before jobs data lands, investors will see the latest reading of the Fed’s preferred inflation gauge on Thursday — the personal consumption expenditure price index. Core PCE, which strips out volatile food and energy prices, is expected to come in 4.2 per cent higher year-on-year for July, up slightly from 4.1 per cent in June.
The yield on the benchmark 10-year Treasury note was down 0.03 percentage points on Monday at 4.2 per cent, while the policy-sensitive two-year yield was down 0.01 percentage point at 5.05 per cent. Bond yields fall as their prices rise.
Trading volumes are often lighter in late August, compounded on Monday by the UK holiday.
Elsewhere in Asian markets, Japan’s Topix index rose 1.5 per cent and Australia’s S&P/ASX 200 gained 0.6 per cent.
