Australia

Australian shares are set to open higher, after US stocks rallied on Tuesday in response to a tame inflation report.

ASX futures were up 0.73% or 57 points as of 8:00am on Wednesday, suggesting a higher open.

US stocks rallied Tuesday after fresh inflation data boosted investor hopes that the Federal Reserve could cut interest rates by a half point next month.

The tech-heavy Nasdaq Composite climbed 2.4%, powered by a jump in Nvidia and other Magnificent Seven tech stocks. The S&P 500 gained 1.7%. The Dow Jones Industrial Average rose by 1%, or about 409 points.

In commodity markets, Brent crude oil was down 1.6% to US$80.96 a barrel, while gold was flat at US$2,465.90.

The Australian dollar was at 66.29 US cents, down from its previous close of 66.32.

Asia

Chinese shares ended higher, supported by tech-hardware and financial stocks. Investors' focus was on companies' first-half performance as the earnings season got under way. Foxconn Industrial Internet gained 0.7% and Luxshare Precision Industry added 1.6%. Citic Securities rose 1.0% and East Money Information increased 1.6%. Pharmaceutical stocks weighed on the market, with Jiangsu Hengrui Medicine shedding 2.2% and WuXi AppTec losing 0.4%. The benchmark Shanghai Composite Index ended 0.3% higher at 2,867.95, the Shenzhen Composite Index rose 0.5% and the ChiNext Price Index gained 0.9%.

Hong Kong's Hang Seng Index closed 0.4% higher at 17,174.06, tracking U.S. futures. The Hang Seng Tech Index finished flat at 3429.69. Investors are looking for catalysts ahead of earnings due from Chinese tech giants, Sonija Li, head of retail research at MIB Securities HK, writes in a note. Among decliners, Country Garden Services lost 5.3%, Alibaba Health Informational Technology fell 4.9% and Wharf Real Estate Investment Company was 2.55% lower. Among winners, China Unicom (Hong Kong) rose 3.2%, ENN Energy gained 3.0% and Xiaomi Corp. was 2.7% higher.

Japanese stocks end higher, led by gains in electronics and financial stocks, as global financial markets restore some stability following sharp selloffs seen earlier this month. Keyence gains 8.5% and Nomura Holdings climbs 6.0%. The Nikkei Stock Average rises 3.4% to 36,232.51. Investors are focusing on any escalation of conflicts in the Middle East, as well as earnings. The 10-year Japanese government bond yield falls one basis point to 0.845%.

India's benchmark Sensex closed 0.9% lower at 78,956.03, weighed by financial stocks. HDFC Bank fell 3.5%, Bajaj Finance declined 2.15% and Kotak Mahindra Bank declined 1.2%. Among gainers, Titan Co. closed 1.8% higher and HCL Technologies added 0.6%. Investors are focusing on upcoming trade data for signals on the strength of the domestic economy.

Europe

Stocks in the U.K. rose Tuesday, as the FTSE 100 Index added 0.3% to 8,235.23.

Among large companies, Just Group PLC was the biggest gainer during the session, surging 14%, and Bridgepoint Group PLC surged 5.7%. Bellway PLC rounded out the top three movers on Tuesday, as shares gained 4.1%.

Genuit Group PLC posted the largest decline, falling 4.6%, followed by shares of Dowlais Group PLC, which fell 4.4%. Shares of Marshalls PLC fell 3.2%.

In other parts of Europe markets closed higherlat, with the STOXX Europe 600 Index up 0.5% at 501.66, Germany's DAX rose 0.5% to 17,812.05 and France's CAC 40 added 0.4% to 7,275.87.

North America

Stocks rallied Tuesday after fresh inflation data boosted investor hopes that the Federal Reserve could cut interest rates by a half point next month.

The tech-heavy Nasdaq Composite climbed 2.4%, powered by a jump in Nvidia and other Magnificent Seven tech stocks. The S&P 500 gained 1.7%. The Dow Jones Industrial Average rose by 1%, or about 409 points.

The producer-price index, a measure of the prices businesses receive for their goods and services, rose 0.1% in July from the prior month, which was less than economists had forecast.

The softer-than-expected PPI data eases fears of a U.S. stagflation where growth slows, unemployment rises and price pressures remain sticky, said Emily Leveille, a portfolio manager for Thornburg Investment Management.

"To me, that's the biggest positive read from this data today," she said.

Inflation will remain center stage on Wednesday, when the consumer-price index for July could give traders more clues on the Federal Reserve's next move on interest rates.

Most professional investors remain optimistic about the Fed's ability to bring inflation down without tipping the economy into a recession, but many now expect the central bank to cut rates aggressively to guarantee the outcome, according to Bank of America's latest global fund-manager survey.

Interest-rate futures implied a 55% chance of a half-point cut in September on Tuesday, according to CME data. On Monday, they had indicated even chances between a quarter-point cut and a half-point cut.

Markets have stabilized after last week's turbulence shattered a lull in recent months. The Cboe Volatility Index, also known as Wall Street's fear gauge, closed below 20 for the first time since the start of the month, after spiking during last week's global stock-market gyrations.

Still, some investors are bracing for more volatility, with the economy slowing and November's presidential elections approaching.

In the bond market, companies are issuing more debt than normal in August, which has typically been a slow month. That is a sign some issuers are trying to get ahead of expected volatility to complete bond sales and lock in borrowing costs, according to Connor Fitzgerald, a portfolio manager at Wellington Management.

"Markets have become comfortable and accustomed to the soft-landing narrative, but the recent move in the unemployment rate has started to really challenge that," he said.

For the year, the S&P 500 is up 14%.

Among individual stocks Tuesday, Starbucks stock rallied about 25%, its largest one-day percentage gain on record after the coffee chain replaced its chief executive with Chipotle's boss. Shares of Chipotle tumbled 7.5%.

Trump Media & Technology Group, the parent company of Donald Trump's social-media platform Truth Social, fell 3.6%. On Monday, the former president posted on X for the first time in nearly a year and gave an interview on the platform.

Home Depot rose 1.2% after the company cut its outlook for comparable-store sales, saying high interest rates weighed on home-improvement spending.

The yield on the U.S. 10-year Treasury note edged lower to 3.853%. Yields and prices move inversely. Benchmark U.S. crude fell 2% to $78.35 a barrel after fears of a wider Middle East war faded.