Asian Markets Rise on Growing Fed Rate-Cut Expectations as Tech Stocks Lead Gains

Asian equities moved higher on Tuesday as optimism increased that the U.S. Federal Reserve will cut interest rates in December, encouraging investors to rotate back into global technology stocks despite ongoing concerns about stretched valuations.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.75%, recovering part of last week’s 4% decline and putting the benchmark on track for its first monthly loss since March.
European futures, however, dipped 0.2%, signaling a softer open.

U.S. Treasury yields were little changed, with the 10-year yield steady at 4.038% and the two-year yield flat at 3.495% after a modest drop in the prior session.

Japan’s Nikkei gained only 0.1% after a strong early advance, following a holiday closure. The index had fallen 3.5% the week before amid a risk-off mood.
Hong Kong’s Hang Seng edged 0.6% higher, while China’s CSI300 rose 1.1%.

Rate-cut expectations intensified after Fed Governor Christopher Waller said recent data shows the U.S. labor market remains soft enough to warrant another 25-basis-point reduction.
According to CME’s FedWatch Tool, markets now price an 85.1% probability of a December cut—sharply higher than 42.4% a week earlier. The Federal Reserve meets on December 9–10.

The dollar remained stable despite shifting rate expectations. The euro last traded at $1.15125, while the dollar index hovered at 100.25, retaining most of last week’s nearly 1% advance.

Geopolitics also remained in focus. Tensions between Tokyo and Beijing persist following comments by Japan’s Prime Minister Sanae Takaichi, suggesting a Chinese attack on Taiwan could prompt a Japanese military response.
Takaichi spoke with U.S. President Donald Trump on Tuesday, following his Monday call with China’s President Xi Jinping. Trump said he plans to travel to Beijing in April at China’s invitation—seen as a further signal of improving relations after the countries’ trade-war truce.

U.S. equity futures softened slightly, with both Nasdaq and S&P 500 futures marginally lower.
U.S. stock and bond markets will close Thursday for Thanksgiving, reopening Friday for a half-day session.

In commodities, Brent crude slipped 0.52% to $63.04, and WTI fell 0.48% to $58.56.
Spot gold held steady at $4,141 an ounce.