Australia

Australian shares are set to gain at the open, following increases in US stocks overseas. Utilities stocks continued to underperform but tech stocks climbed, helping to lift equity indexes.

ASX futures were 45 points or 0.63% higher at 7097 as of 8:00am on Friday, suggesting gains at the open.

US stocks rose as the recent rally in bond yields paused and investors dipped back into shares of communication services and material companies.

The rise in Treasury yields paused Thursday, helping stocks stage their biggest move higher in weeks.

The benchmark S&P 500 advanced 0.6%, and the tech-focused Nasdaq Composite gained 0.8%, each notching their best day since Sept. 14, and the Dow Jones Industrial Average edged up 0.3%.

Stocks' gains were fairly broad-based, with utilities the only sector in the S&P 500 to retreat. Materials and communications services led the advancers. A sharp rise in bond yields had punished stocks after the Federal Reserve last week raised its interest-rate forecasts for next year.

Weekly jobless claims came in lower than expected, but investors are starting to focus more on an impending government shutdown which could hamper the resilient economy. Utilities stocks continued to underperform as bond yields remain elevated and energy stocks edged lower as oil prices posted a rare decline and technology stocks lifted.

Volatility in the $25 trillion Treasury market continued to be a key focus for investors. Treasury yields were showing signs of stabilizing after shooting higher in recent session after the Federal Reserve indicated rates could stay higher than expected next year, and potentially beyond, while the central bank works to bring inflation down to its 2% yearly target. That has a lot of focus on Friday's release of the Fed's preferred inflation gauge, the personal-consumption expenditures price index (PCE) for August.

The yield on the benchmark 10-year Treasury note slipped to 4.596%, from 4.625% Wednesday, snapping a three-day streak of gains. Yields, which rise when bond prices fall, have recently surged in large part because the economy has remained strong, causing investors to question how soon the Fed will be able to start cutting interest rates.

In commodity markets, Brent crude oil fell 1.21% to $US95.38 a barrel, Gold dipped to US$1,865.40 and Iron ore gained 1.7% to $US118.55 a tonne.

In local bond markets, yields on Australian 2 Year government bonds gained, rising to 4.10% and the 10 Year yield moved higher to 4.45%. Overseas, the US Treasury notes retreated, with the yield on 2 Year dipping to 5.06% and 10 yield falling to 4.57%.

The Australian dollar climbed to 64.25 US cents from its previous close of 63.50 US cents.The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies was dipped slightly to 100.08.

Asia

Chinese shares finished mostly higher, with the Shanghai Composite Index and the Shenzhen Composite Index closing in the green ahead of the Golden Week holidays. The indexes, which rose 0.1% and 0.4% respectively, were mainly buoyed by oil-related stocks. Auto and electronic-component shares also lent support. The rise in global oil prices boosted oilfield services and equipment companies like Nanjing Develop Advanced Manufacturing, which jumped 6.6%. Bomesc Offshore Engineering and Suzhou Douson Drilling gained 4.1% and 3.9%, respectively. In Shenzhen, shares of optoelectronics specialist Ofilm closed nearly 10% higher after the latest smartphone offering from Huawei sold out within minutes of its launch. The tech-heavy ChiNext Price Index closed 0.1% lower.

Hong Kong shares closed lower as property developers weighed on the market. The mood dimmed as trading in shares of Evergrande Group and two of its units was halted after news reports that the company's founder and chairman is under police surveillance. The benchmark Hang Seng Index dropped 1.4% to 17373.03 while the Hang Seng Mainland Properties Index also lost 1.4%. Country Garden fell 3.3% and Longfor Group shed 2.95%. Macau casino stocks added to the losses, with Galaxy Entertainment and Sands China falling 5.7% and 4.75% respectively right before the Golden Week holiday. Tech companies also slid, with Meituan and Alibaba Health losing 3.8% and 3.7% respectively. The Hang Seng Tech Index ended down 1.45%. Among the few gainers was clothing maker Shenzhou International, which rose 3.5%, and telco China Unicom, which added 1.6%.

Japanese stocks ended lower, dragged by falls in high-dividend stocks as many stocks trade ex-dividend and concerns continue about higher borrowing costs. SoftBank Group dropped 4.0%, Astellas Pharma shed 3.5% and Japan Post Holdings lost 2.8%. The Nikkei Stock Average fell 1.5% to 31872.52. The 10-year Japanese government bond yield rose 2.0 basis points to 0.755%, the highest level since September 2013. Investors are focused on US economic data and their impact on Treasury yields.

Indian shares gave up early gains and closed lower, weighed by weakness in tech and consumer stocks. Investors are waiting for the Reserve Bank of India's interest rate decision at its meeting next week. Tech and consumer stocks led losses, as Tech Mahindra shed 4.2% and Asian Paints lost 3.7%. Mahindra & Mahindra and Infosys were down 2.1% and 1.9%, respectively. Larsen & Toubro bucked the trend with a 2.1% rise, and was among the few gainers. Power Grid Corp. rose 0.7%. The benchmark Sensex closed 0.9% lower at 65508.32.

Europe

European stocks rose as investors stay upbeat despite ongoing economic uncertainty. The Pan-continental Stoxx Europe 600 gained 0.4%, the French CAC 40 rallied 0.6% and the German DAX climbed 0.7%, with banks and miners among the biggest winners. Still, Brent crude dropped 0.9% to $93.50 a barrel. The Dow rose 0.4%. "After days of selling, some cautious buying has been seen in stocks this afternoon, marking a change from the tone of the week so far," IG analyst Chris Beauchamp wrote. "European markets have edged higher and on Wall Street, traders have done a small spot of bargain-hunting as the end of 3Q looms. But worries about higher oil prices and rising yields haven't gone away.

The FTSE 100 closed up 0.11% Thursday, though it slightly underperformed more positive European peers as surging gilt yields weigh on the index. House builders and real estate stocks are bearing the brunt of the rise in yields, with Barratt Developments, Taylor Wimpey and Rightmove the worst performers on the U.K. benchmark, said CMC Markets UK chief market analyst Michael Hewson. "On the flip side, basic resources are helping to limit the underperformance in the U.K. with gains for Anglo American, Antofagasta and Rio Tinto," Hewson said.

North America

US stocks rose as the recent rally in bond yields paused and investors dipped back into shares of communication services and material companies.

The rise in Treasury yields paused Thursday, helping stocks stage their biggest move higher in weeks.

The benchmark S&P 500 advanced 0.6%, and the tech-focused Nasdaq Composite gained 0.8%, each notching their best day since Sept. 14, and the Dow Jones Industrial Average edged up 0.3%.

Stocks' gains were fairly broad-based, with utilities the only sector in the S&P 500 to retreat. Materials and communications services led the advancers. A sharp rise in bond yields had punished stocks after the Federal Reserve last week raised its interest-rate forecasts for next year.

Weekly jobless claims came in lower than expected, but investors are starting to focus more on an impending government shutdown which could hamper the resilient economy. Utilities stocks continued to underperform as bond yields remain elevated and energy stocks edged lower as oil prices posted a rare decline and technology stocks lifted.

Volatility in the $25 trillion Treasury market continued to be a key focus for investors. Treasury yields were showing signs of stabilizing after shooting higher in recent session after the Federal Reserve indicated rates could stay higher than expected next year, and potentially beyond, while the central bank works to bring inflation down to its 2% yearly target. That has a lot of focus on Friday's release of the Fed's preferred inflation gauge, the personal-consumption expenditures price index (PCE) for August.

The yield on the benchmark 10-year Treasury note slipped to 4.596%, from 4.625% Wednesday, snapping a three-day streak of gains . Yields, which rise when bond prices fall, have recently surged in large part because the economy has remained strong, causing investors to question how soon the Fed will be able to start cutting interest rates.

"My sense is the market is sniffing out that the 10-year Treasury is going to start to stabilize. The market is almost trying to front-run that," said Keith Lerner, co-chief investment officer at Truist Advisory Services.

The three major US indexes remain higher for the year. Still, all three are on track to post losses for the third quarter, which ends Friday.

Rising bond yields can hurt stocks in several ways. Some investors view technology stocks as particularly vulnerable because they tend to be valued based on earnings expected to arrive further in the future, and those profits are worth less when investors can get an improved risk-free return by holding government bonds to maturity.

At the same time, higher bond yields and borrowing costs could cause a recession, which could do greater damage to companies outside the tech sector.

Leah Traub, a fixed-income portfolio manager at Lord Abbett, said she thinks yields could rise further.

Peloton Interactive shares gained 5.4% after the fitness-equipment company unveiled a partnership with the apparel-maker Lululemon Athletica, ending a turf battle between the companies. Chip stocks also rose. Advanced Micro Devices added 4.8%.

CarMax's shares shed 13% after the used-car retailer reported that revenue declined 13.1% in its quarter ended Aug. 31 compared with a year earlier. While Americans are window-shopping for used cars, sticker shock is keeping them from buying.

The WSJ Dollar Index, which measures the greenback against a basket of currencies, ended a seven-day streak of gains fueled by rising Treasury yields. The dollar weakened as bond yields eased.

The rise in oil markets also paused. The front-month Brent futures contract fell 1.2% to $95.38 a barrel.