World shares mostly rise as a cut to US interest rates next week looks more certain

In U.S. futures trading, the S&P 500 slid 0.2% while that for the Dow Jones Industrial Average shed nearly 0.3%.

Japan's Nikkei 225 closed 0.9% higher to 44,768.12, with Japanese stocks hitting fresh records. Shares in semiconductor company Tokyo Electron, Sony Group and Fast Retailing were among the movers.

In Chinese markets, Hong Kong’s Hang Seng index rose 1.2% to 26,388.16. Tech shares led gainers on AI optimism, while property stocks climbed as Beijing moves to help cover unpaid bills of local governments. The Shanghai Composite index slipped 0.1% to 3,870.60.

In Seoul, the Kospi climbed 1.5% to 3,395.54 while Australia's S&P/ASX 200 added 0.7% to 8,864.90. India's BSE Sensex rose 0.5% while Taiwan's Taiex was up 1%.

“What’s moving markets now isn’t just another rally — it’s the unmistakable shift of a dovish Fed tide, the kind that doesn’t rise in isolation but swells across oceans, lifting virtually every boat in every harbour,” Stephen Inness of SPI Asset Management said in a market commentary.

Wall Street’s record-setting run kept rolling Thursday, and stocks climbed after a mixed set of U.S. data kept the path clear for the Federal Reserve to cut interest rates to boost the economy.

The S&P 500 rose 0.8% and set an all-time high for the third straight day. The Dow Jones Industrial Average rallied 617 points, or 1.4%, and the Nasdaq composite gained 0.7%. Both also hit records.

Treasury yields eased in the bond market following the economic reports, which were some of the final data releases left that could sway the Federal Reserve’s thinking before its meeting next week. The unanimous expectation on Wall Street is that it will cut its main interest rate for the first time this year.

The hope on Wall Street has been for a slowdown, but a precisely measured one. The job market has to be weak enough to get the Fed to cut interest rates, which can give a kickstart to the economy and to prices for investments, but not so much that it causes a recession.

The Fed has been hesitant to cut interest rates throughout 2025 because of the threat that President Donald Trump’s tariffs could make inflation worse. Lower interest rates can push inflation even higher.

A report on inflation Thursday showed that prices are continuing to rise faster for U.S. households than the Fed's 2% target, but no more than economists expected. Consumers paid prices for food, gasoline and other costs of living that were 2.9% higher in August than a year earlier, a slight acceleration from July’s 2.7% inflation rate.

Traders believe the Fed will see the slowing job market as the bigger problem than inflation.

Stocks of companies that could benefit from lower interest rates rallied on Wall Street, including owners of real estate and homebuilders.

In other dealings on Friday, benchmark U.S. crude shed 12 cents to $62.25 per barrel. Brent crude, the international standard, slipped 4 cents to $66.33 per barrel.

The U.S. dollar rose to 147.92 yen from 147.15 yen. The euro slid to $1.1716 from $1.1740.