Tuesday saw broad gains across Asian stock markets, with Japan's benchmark index reaching a new all-time high following the historic election victory of the country's first female prime minister.
The Nikkei 225 surged 2.6% to close at 57,821.58. This came after the index had already soared 3.9% on Monday to a record high, following an overwhelming parliamentary election win for the party led by Sanae Takaichi. Markets widely anticipate that Takaichi will advance reforms expected to stimulate the economy and equity markets.
Australia's S&P/ASX 200 index rose 0.3% to 8,893.60. South Korea's KOSPI increased by 0.6% to 5,327.80. Hong Kong's Hang Seng Index jumped 1.0% to 27,300.00, while the Shanghai Composite Index edged up 0.2% to 4,130.20.
On Wall Street, US stocks posted their best weekly performance since May last week, yet the market continues to face multiple concerns, including criticism that stock valuations have become excessively high after repeated record climbs.
The S&P 500 gained 0.5% to 6,964.82, nearing the all-time high set two weeks prior. The Dow Jones Industrial Average inched up less than 0.1% to 50,135.87, and the Nasdaq Composite rose 0.9% to 23,238.67.
A central question remains a key focus for markets: whether massive investments in artificial intelligence by tech giants and other companies will generate sufficient profits to justify their value.
On Monday, stocks linked to the AI boom helped drive the market higher. Chip stocks generally advanced, with Nvidia rising 2.4% and Broadcom gaining 3.3%.
In the bond market, US Treasury yields held relatively steady ahead of potentially market-moving data releases this week. The US government will release the latest monthly jobs report on Wednesday, followed by the latest monthly consumer inflation data on Friday.
Both reports could influence market expectations for the Federal Reserve's interest rate policy. The Fed has paused its rate-cutting cycle, but a weakening labor market could prompt it to resume cuts sooner. Conversely, overheating inflation could lead it to maintain current rates for a longer period.
One reason US stocks remain near record highs is the market's expectation that the Fed will continue to cut rates later this year. Rate cuts can stimulate the economy but may also exacerbate inflation.
The yield on the 10-year US Treasury note eased to 4.20% from 4.22% at the end of trading on Friday.
Gold rose 2% to settle at $5,079.40 per ounce. After nearly doubling over the past 12 months, the price of gold has been volatile, fluctuating between $4,500 and nearly $5,600. Silver experienced even sharper swings, surging 6.9% on Monday.
Bitcoin briefly surpassed $71,000 over the weekend and was trading slightly below that level early Tuesday. Last week, it had fallen to near $60,000, a drop of over 50% from its all-time high reached in October.
In other early Tuesday trading, US benchmark crude oil fell 4 cents to $64.32 per barrel, while international benchmark Brent crude declined 2 cents to $69.02.
The US dollar dipped slightly against the Japanese yen to 155.75 yen from 155.83. The euro traded at $1.1909, down from $1.1916.