Asian stocks mostly higher after Wall Street hits new records

BANGKOK (AP) — Stocks were mostly higher in Asia Thursday after Wall Street's record rally continued.

Stocks fell in Chinese markets but rose elsewhere in the region. U.S. futures were virtually unchanged and oil prices fell.

U.S. stocks continued to climb in a holiday-shortened session on Wednesday after weak economic reports left the door open for possible interest rate cuts.

U.S. markets will be closed on Thursday for Independence Day.

Investors around the world are eagerly awaiting the Federal Reserve's two-decade low rate cuts to slow growth and control inflation.

In Tokyo, the Nikkei 225 gained 0.6 percent to 40,815.95 points, as buying in automaker shares and other export-oriented stocks kept the benchmark index near 35-year highs.

Toyota Motor Corp. rose 1.3% and computer testing equipment maker Advantest Corp. gained 2.4%.

Hong Kong's Hang Seng Index recovered from early losses, rising 0.1% to 17,988.25, and the Shanghai Composite Index lost 0.4% to 2,969.45.

Taiwan's Taiex jumped 1.2% as chipmaker and market heavyweight Taiwan Semiconductor Manufacturing Corp. gained 2.7%.

In Australia, the S&P/ASX 200 jumped 1% to 7,815.80, while the Kospi in Seoul gained 0.7% to 2,813.54.

On Wednesday, the S&P 500 index rose 0.5%, hitting a new record high for the second consecutive day and the 33rd time this year. It closed at 5,537.02 points.

The Dow Jones Industrial Average fell 0.1% to 39,308.00, and the Nasdaq Composite gained 0.9% to 18,188.30.

Tesla helped lift the market again, rising 6.5% after reporting a smaller drop in spring sales than analysts had feared. It was one of the strongest forces pushing the S&P 500 higher, along with Nvidia. Wall Street’s darling in artificial intelligence rose 4.6%, bringing the chipmaker’s gain for the year to 159%.

The bond market was more buoyant, with Treasury yields falling after a series of weaker-than-expected reports on the U.S. labor market and services companies. Those data could help keep the Federal Reserve on track to deliver the interest rate cuts Wall Street has been seeking by year-end.

Business activity in the U.S. real estate, retail and other service sectors contracted in June for just the third time in 49 months, a report showed, falling short of economists' expectations. Perhaps more important for Wall Street, the Institute of Supply Management's report also showed that prices are rising at a slower pace.

This follows reports earlier in the morning indicating a slowdown in the labor market.

The hope on Wall Street is that the economy will slow enough to contain upward pressure on inflation, but not so much that it throws workers out of work and triggers a recession.

A much more anticipated report will come Friday, when the U.S. government gives its full update on how many workers employers added to their payrolls during the month of June.

The yield on the 10-year Treasury note fell to 4.35% from 4.44% late Tuesday, a notable move for the bond market, and much of the decline came after the release of the U.S. services report. It has been falling since April, on hopes that inflation will slow enough to prompt the Federal Reserve to cut its key interest rate, which is the highest level in more than two decades.

In other trading, benchmark U.S. crude oil fell 56 cents to $83.32 a barrel in electronic trading on the New York Mercantile Exchange.

Brent oil, the international benchmark, lost 51 cents to $86.83 a barrel.

The U.S. dollar fell to 161.50 Japanese yen, reflecting expectations that U.S. interest rate cuts could narrow the rate differential with Japan, where the benchmark lending rate is close to zero.

The euro remained unchanged at $1.0787.

AP Business reporter Stan Choe contributed to this report.