Stocks in Asia are set to extend gains as risk appetite across financial markets got a further boost from China’s latest stimulus measures and as US benchmarks hit fresh records.

Futures pointed higher in Hong Kong, Japan and Australia. In the US, the S&P 500 climbed to its 42nd closing record of this year while the Nasdaq Golden Dragon Index - a gauge of Chinese shares listed in the US - jumped 11%, its biggest gain since early 2022. Contracts for US indexes also rose early Friday. 

Emerging-market stocks had their best day in nearly a year on Thursday, propelled higher by new stimulus pledges by the Chinese government and strong US economic data. The Bloomberg Dollar Spot Index declined, 10-year US Treasury yields advanced, metals rose and oil dropped.

The rally was ignited by a pledge from China’s top leaders for more fiscal spending, measures to stabilize the property sector and “forceful” rate cuts, signaling greater urgency to stem the slowdown in growth. Markets were also lifted during the North American trading day with data showing that the US economy bounced back from the pandemic in stronger shape than previously estimated.

Now, traders are waiting for further details on China’s stimulus measures ahead of a weeklong holiday as well as the next batch of catalysts that could give them hints about the US economy, with the Federal Reserve’s preferred inflation indicator and a snapshot of consumer demand releasing Friday.

“Greater stimulus measures out of China and the market pricing an aggressive Fed easing cycle, while the US economy is strong, bode well for risk assets,” Elias Haddad, a strategist at Brown Brothers Harriman, wrote in a note. “This encouraging risk backdrop is a drag on the dollar mostly against growth-sensitive currencies.”

US stock indexes were also propelled higher by Micron Technology Inc., which gave a strong forecast aided by AI demand. On the other hand, news of the US Justice Department’s probe of Super Micro Computer Inc. — also a beneficiary of the AI boom — pushed its shares lower. After the closing bell, Costco Wholesale Corp. posted higher-than-expected profit.

Elsewhere, the Swiss National Bank cut borrowing costs by a quarter point at a third straight meeting. Mexico also cut interest rates, joining easing steps by Hungary and the Czech Republic earlier this week.

Revised data showed the US economy emerged from the pandemic in better shape than initially expected, spurred mainly by bigger consumer-driven growth fueled by robust incomes. A decline in US jobless claims underscored the resilience of the labor market. But investors tuning into commentary from Fed Chair Jerome Powell on Thursday didn’t get any details on the economic outlook or path for monetary policy.

“We think there is the potential that economic data will be more resilient, especially on jobs, than the market is expecting,” said Peter Tchir, head of macro strategy at Academy Securities. 

In commodities, oil slid further as Saudi Arabia was reportedly committed to increasing output in December, while Libya named its new central bank governor, opening the way to reviving some crude production. Copper rallied back above $10,000 a ton and iron ore broke through $100 while gold hit yet another record high. 

  - Bloomberg