Asian stocks climb after Wall Street rallies on hopes for lower interest rates

In South Korea, the Kospi also gained 2.1%, to 3,940.15, helped by a 2.3% gain for Samsung Electronics, the market's biggest heavyweight.

Chinese markets saw more modest gains.

Hong Kong's Hang Seng rose 0.5% to 26,013.33 and the Shanghai Composite index edged 0.1% higher, to 3,875.48.

Shares in the Chinese e-commerce giant Alibaba fell 1.1%. Its U.S.-traded shares fell 2.3% on Tuesday after its profit fell short of forecasts, though it reported stronger revenue than analysts had expected for the latest quarter.

Australia's S&P/ASX 200 climbed 0.9% to 8,615.30. In New Zealand, the S&P/NZX 50 added 0.7% after the central bank cut its Official Cash Rate to 2.25% from $2.5%.

On Tuesday, the S&P 500 rose 0.9% to 6,765.88, while the Dow Jones Industrial Average rallied 1.4% to 47,112.45. The Nasdaq composite gained 0.7% to 23,025.59.

Easier interest rates can give particularly big boosts to smaller companies, because many of them need to borrow to grow. The Russell 2000 index of the smallest U.S. stocks jumped 2.1% to lead the market.

Mixed economic data left traders betting on a nearly 83% probability that the Fed will cut in December, according to data from CME Group.

Shoppers bought less at U.S. retailers in September than economists expected, while confidence among U.S. consumers worsened by more in November than expected, signals the economy could use help from lower interest rates.

Easier rates can boost the economy by encouraging households and companies to borrow more and investors to pay higher prices for investments than they would otherwise.

Another report said U.S. inflation at the wholesale level was a touch worse in September than expected, but a closely tracked underlying trend was slightly better. Lower interest rates can worsen inflation, and higher prices are the main reason the Fed has been holding back on rate cuts.

Later Wednesday, the U.S. was due to release more data that had been delayed by the six-week long government shutdown.

The Fed has already cut rates twice this year in hopes of shoring up the slowing job market.

Several retailers leaped after delivering stronger profits for the summer than analysts expected.

Abercrombie & Fitch soared 37.5% after the apparel seller reported a better profit than expected, while Kohl’s surged 42.5% after reporting a profit for the latest quarter, when analysts were expecting a loss. Best Buy rose 5.3% after boosting its profit forecast for the full year following a better-than-expected third quarter, citing strength across computing, gaming and mobile phones.

In other dealings early Wednesday, U.S. benchmark crude oil gained 24 cents to $58.19 per barrel. Brent crude, the international standard, picked up 26 cents to $62.06 per barrel.

The U.S. dollar slipped to 156.03 Japanese yen from 156.06 yen. The euro rose to $1.1587 from $1.1569.

AP Business Writer Stan Choe contributed.