Asian stocks rise on Fed rate-cut hopes, Alphabet

Asian shares rose at the open Friday after optimism about the Federal Reserve cutting rates sooner than anticipated powered a rally in US stocks and Alphabet Inc. reported solid earnings.

Shares in South Korea gained 1.1% after Treasury Secretary Scott Bessent said the US may reach an “agreement of understanding” on trade as soon as next week. Equities in Japan advanced 1% after the S&P 500 jumped Thursday to the highest since the day President Donald Trump announced his tariff offensive. Gold and a gauge of the dollar edged up.

Google parent Alphabet rose 4.9% in after-hours trading after reporting first-quarter revenue and profit that exceeded analysts’ estimates. That helped futures contracts for the S&P 500 and the Nasdaq 100 gain 0.4% in early Asian trading.

Global stocks have advanced for three consecutive days as optimism the White House will clinch crucial trade deals with top economic partners has boosted risk appetite. Comments from Fed officials saying they would be open to rate cuts if the central bank gathers clear evidence of the economy’s direction also boosted sentiment.

“While the Fed has maintained a cautious approach to monetary easing, we believe it will be willing and able to respond to signs of economic weakness, especially rising layoffs,” said Ulrike Hoffmann-Burchardi, chief investment officer for global equities at UBS Global Wealth Management.

Fed Governor Christopher Waller said he’d support rate cuts in the event aggressive tariff levels hurt the jobs market, speaking in an interview on Bloomberg Television. Cleveland Fed President Beth Hammack told CNBC the central bank could move on rates as early as June if it has clear evidence of the economy’s direction.

On trade negotiations, President Donald Trump said his administration was talking with China on trade, after Beijing denied the existence of negotiations on a deal and demanded the US revoke all unilateral tariffs.

“They had a meeting this morning,” Trump said Thursday. “It doesn’t matter who ‘they’ is. We may reveal it later, but they had meetings this morning, and we’ve been meeting with China.”

Dozens of nations have appealed to the Trump administration for relief from higher tariffs that have been suspended 90 days to provide time for talks.

The US-South Korea discussions were “very successful,” according to Bessent. That follows the US making “significant progress” toward a bilateral trade deal with India.

Meanwhile Japan intends to push back against any US effort to bring it into an economic bloc aligned against China because of the importance of Tokyo’s trade ties with Beijing, according to current and former Japanese government officials.

Several analysts are souring on the profit outlook for companies due to the risk of an economic slowdown, with the US benchmark’s earnings revisions breadth — or estimated upgrades versus downgrades — approaching downside extremes.

One of Wall Street’s biggest bulls expects tariffs hitting US companies the hardest. Deutsche Bank AG’s Bankim Chadha slashed his year-end S&P 500 target by 12% to 6,150. He also sees S&P 500 earnings declining 5% this year, compared with a consensus expecting 8% growth.

“Investors should continue to focus on the long term, with an eye toward companies with high earnings achievability, limited tariff exposure, and quality balance sheets,” said Daniel Skelly, head of Morgan Stanley’s Wealth Management Market Research & Strategy Team.