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Asian Stocks Rally on Fed Rate Cut Hopes and Progress in US-China Trade Talks

Asian Stocks Rally on Fed Rate Cut Hopes and Progress in US-China Trade Talks. Source: Photo by Photo By: Kaboompics.com

Asian stock markets surged on Monday amid broad-based buying, driven by rising expectations of a U.S. Federal Reserve interest rate cut and easing tensions between Washington and Beijing. The rally followed Wall Street’s record highs last week, further boosting investor sentiment across the region. U.S. stock futures also advanced in early Asian trading hours.

Markets are widely anticipating a 25-basis-point rate reduction from the Fed at the conclusion of its two-day policy meeting on Wednesday. The move comes after softer-than-expected U.S. inflation data for September, which strengthened the case for monetary easing. Investors are now closely watching for signals on the pace and scale of future rate cuts, which could shape global liquidity trends.

Optimism also grew after U.S. and Chinese negotiators reached a preliminary trade framework during talks in Kuala Lumpur over the weekend. The agreement paves the way for a potential decision by Presidents Donald Trump and Xi Jinping at a summit in South Korea later this week. U.S. Treasury Secretary Scott Bessent confirmed that both nations agreed to delay new tariffs and suspend China’s planned rare earth export restrictions, signaling a step toward stabilizing trade relations.

In China, the Shanghai Composite gained 0.8%, while the blue-chip CSI 300 rose 0.7%. Hong Kong’s Hang Seng Index climbed 1%, led by a 1.2% jump in the Hang Seng TECH Index.

Japan’s Nikkei soared over 2%, surpassing the 50,000 mark for the first time, while the TOPIX reached a record high. Investors expect new Prime Minister Senae Takaichi’s administration to roll out additional fiscal stimulus to bolster Japan’s recovery.

South Korea’s KOSPI hit an all-time high, advancing 2.3%, fueled by strong gains in Samsung Electronics and SK Hynix. Meanwhile, Australia’s ASX 200 and Singapore’s Straits Times Index each added 0.4%, and India’s Nifty 50 futures edged higher ahead of market open.

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