World shares charge higher after US stocks rally to records on hopes for
interest rate cuts
[August 13, 2025] By
ELAINE KURTENBACH
BANGKOK (AP) — Shares charged higher Wednesday in Europe and Asia after
U.S. stocks hit new records when data showed inflation across the United
States improved slightly last month.
Tokyo's benchmark Nikkei 225 added to its record set a day earlier.
The future for the S&P 500 was up 0.2%, while that for the Dow Jones
Industrial Average was little changed.
A recent rally in share prices has been driven partly by relief over an
extended truce in President Donald Trump’s trade war with China, and
partly by persisting hopes the Federal Reserve will cut interest rates.
Those were reinforced by a moderation in the consumer price index in
July.
Germany's DAX rose 0.8% to 24,207.78 and the CAC 40 in Paris picked up
0.4% to 7,784.63. Britain's FTSE 100 edged 0.1% higher, to 9,157.26.
“Asia woke up in full risk-on mode, riding the coattails of a U.S.
session that looked like someone hit the ‘infinite bid’ button after CPI
didn’t blow the inflation doors off,” Stephen Innes of SPI Asset
Management said in a commentary.
China and the U.S. agreed to extend by 90 days from Aug. 12 their pause
in drastically higher tariff rates on each others' exports to allow more
time for talks on a broad trade agreement. Although uncertainty over
what the negotiations will yield remains, the truce has relieved
pressure on companies and countries across Asia that rely heavily in
supply chains routed through China.
Hong Kong's Hang Seng surged 2.6% to 25,613.67, while the Shanghai
Composite index added 0.5% to 3,683.46.
In Japan, relief over the Trump administration's confirmation that its
exports will face a flat 15% U.S. import duty has driven strong buying
of computer chip-related companies and other exporters.
The Nikkei 225 gained 1.3% to 43,274.67.
Elsewhere in Asia, South Korea's Kospi advanced 1.1% to 3,224.37. In
Australia, the S&P/ASX 200 shed 0.6% to 8,827.10.
Taiwan's Taiex was up 0.9% and the Sensex in India gained 0.5%. In
Bangkok, the SET climbed 1% after the Bank of Thailand cut its key
interest rate by 0.25 percentage points to 1.5%.
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A currency trader talks on the phone near a screen showing the Korea
Composite Stock Price Index (KOSPI) at the foreign exchange dealing
room of the Hana Bank headquarters in Seoul, South Korea, Wednesday,
Aug. 13, 2025. (AP Photo/Ahn Young-joon)
 On Tuesday, the S&P 500 rose 1.1% to
top its all-time high set two weeks ago. It closed at 6,445.76.
The Dow Jones Industrial Average climbed 1.1% to 44,458.61, while
the Nasdaq composite jumped 1.4% to set its own record of 21,681.90.
The better-than-expected report on inflation raised hopes the
Federal Reserve will have the leeway to cut interest rates at its
next meeting in September.
Tuesday’s report said U.S. consumers paid prices for groceries,
gasoline and other costs of living that were overall 2.7% higher in
July than a year earlier. That’s the same inflation rate as June’s,
and it was below the 2.8% that economists expected.
Lower rates would give a boost to investment prices and to the
economy by making it cheaper for U.S. households and businesses to
borrow to buy houses, cars or equipment. President Donald Trump has
angrily been calling for cuts to help the economy, often insulting
the Fed’s chair personally while doing so.
The Fed has hesitated, worried that Trump’s tariffs could make
inflation much worse.
The Fed will get one more report on inflation and another on the
U.S. job market, before its next meeting, which ends Sept. 17. The
most recent jobs report was a stunner, coming in much weaker than
economists expected.
Critics say the broad U.S. stock market is looking expensive after
its surge from a bottom in April. That’s putting pressure on
companies to deliver continued growth in profit.
In other dealings early Wednesday, U.S. benchmark crude oil dropped
26 cents to $62.91 per barrel. Brent crude, the international
standard, declined 20 cents to $65.92 per barrel.
The U.S. dollar fell to 147.24 Japanese yen from 147.84 yen. The
euro climbed to $1.1727 from $1.1677.
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