Asian Markets Surge as Weak US Jobs Data Eases Fed Rate Hike Fears

Asian markets rallied on Monday after a weaker-than-expected US jobs report eased concerns of an imminent Federal Reserve rate hike. The KOSPI surged 1.1%, while Japan's Nikkei 225 rose about 2%.

The unexpected drop in US nonfarm employment by 23,000 in July and downward revisions for May and June reduced the likelihood of a September Fed increase. Futures markets put the probability of a quarter-point move at around 44% on Monday, down from roughly two-thirds a week earlier.

Lower US rate-hike expectations gave Asian technology markets some breathing room after several weeks of sharp moves in AI-linked shares. However, corporate earnings remain a key counterweight, with nearly 90% of S&P 500 companies having reported and underlying earnings growth estimated at about 30% by Bank of America.

The rebound was complicated by higher energy prices, with Brent rising about 1% to $84.40 a barrel and US crude gaining 0.8% to $78.80 due to continued uncertainty around the Strait of Hormuz.