Global stocks rise on Fed expectations, Asian shares touch two-month highs

Global stocks rose on Tuesday, with Asian shares touching a two-month high, as investors were pleased with easing tensions between the United States and China and awaited key earnings reports and minutes from the Federal Reserve's last meeting.

Key points

Asian stocks climbed to a two-month high on Tuesday.
Microsoft shares hit an all-time high after hiring OpenAI head Sam Altman.
Investors will focus on NVIDIA's earnings report and minutes from the Federal Reserve's last meeting on Tuesday.
Treasury yields weakened after Monday's $16 billion 20-year bond issue.
Asian Markets

Global stocks rise on Fed expectations, Asian shares touch two-month highs

Morgan Stanley Capital International's (MSCI) broadest index of Asia-Pacific shares outside Japan gained 0.91 per cent to 509.82 points, touching a high of 510.42 points since 18 September. The index has risen 7 per cent this month and is on track for its biggest one-month gain since January.

Japan's Nikkei fell 0.15 per cent after hitting a new high since 1990 on Monday. The index has risen about 28 per cent this year, making it the best-performing stock market in Asia.

China's blue-chip CSI 300 index rose 0.66 per cent and Hong Kong's Hang Seng gained 1.25 per cent as easing tensions between China and the United States boosted sentiment.

Fed Focus

Investors will focus on Nvidia's earnings report and the minutes of the Federal Reserve's last meeting on Tuesday to judge the direction of interest rates.

Stocks generally rallied in November as a slew of data suggesting U.S. inflation may be slowing triggered bets that the Fed will end its monetary tightening and may cut interest rates next year.

Chase & Co. Group's FedWatch tool shows that traders have almost completely digested the possibility that the Fed will leave interest rates unchanged in December. Group's Fed Watch tool shows traders have almost completely digested the possibility that the Fed will leave rates unchanged in December, with some traders cutting rates as far back as March.

Outlook

Trading is expected to be light for most of the week ahead of the U.S. Thanksgiving holiday on Thursday, and data is thin on the ground this week.

Rob Carnell, head of Asia-Pacific research at ING, said the market now appears to have exhausted its internal momentum and may need external stimulus to drive the next move.

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