Stock market today: Asian shares track Wall Street gains ahead of Fed decision on interest rates

BANGKOK (AP) — Asian shares were mostly higher Wednesday after Wall Street advanced to claim back some of the ground it gave up in another losing month.

Investors are awaiting a decision later Wednesday by the Federal Reserve on interest rates and updates on the state of the U.S. economy. The overwhelming expectation is that the Fed will keep its overnight interest rate steady. The bigger question is how long it will keep that main rate high.

Tokyo's Nikkei 225 index added 2.1% to 31,515.94 a day after the Bank of Japan held back from any major changes to its near-zero interest rate policy, though it adjusted its controls on government bond yields.

The dollar weakened against the Japanese yen, trading at 151.27 yen. It jumped on Tuesday after the central bank's decision.

In Hong Kong, the Hang Seng edged less than 0.1% higher, to 17,119.12. The Shanghai Composite index gained 0.2% to 3,023.64.

South Korea's Kospi advanced 1% to 2,300.48 and the S&P/ASX 200 was up 0.7% at 6,826.50.

European futures were higher early Wednesday. Inflation that has been wearing on European consumers fell sharply to 2.9% in October, its lowest in more than two years as fuel prices fell and rapid interest rate hikes from the European Central Bank took hold. But that encouraging news was balanced by worrisome official figures showing economic output in the 20 countries that use the euro shrank by 0.1% in the July-September quarter.

Tuesday on Wall Street, the S&P 500 gained 0.6% to 4,193.80. The Dow Jones Industrial Average added 0.4% to 33,052.87 and the Nasdaq composite climbed 0.5%, to 12,851.24.

More than 80% of the stocks in the S&P 500 strengthened. It closed October with a loss of 2.2% for the month. That’s its third straight monthly drop, the longest losing streak since the COVID-19 pandemic froze the global economy at the start of 2020.

Pinterest jumped 19% after reporting stronger profit for the latest quarter than analysts expected. Arista Networks was one of the strongest forces pushing the S&P 500 upward, climbing 14% after also reporting stronger profit for the summer than Wall Street had forecast.

Most big U.S. companies have reported stronger profit for the summer than expected, and Caterpillar also joined them. But the heavy machinery maker’s stock sank 6.7% after analysts focused on a slowdown in orders and growing inventories at dealers.

VF Corp., the company behind Vans, Timberlands and other brands, dropped 14% after it reported weaker profit than expected. It also slashed its dividend 70% and withdrew its forecasts for revenue and profit this fiscal year.

Higher bond yields have taken a toll, since they knock down prices for stocks and other investments, while slowing the overall economy and adding pressure on the entire financial system. The 10-year Treasury yield, which is the centerpiece of the bond market, has jumped from less than 3.50% during the spring to more than 5% recently, touching its highest level since 2007.

The 10-year Treasury yield ticked higher to 4.92% early Wednesday from 4.89% late Monday.

The Fed has already pulled its main overnight interest rate above 5.25% to its highest level since 2001. It's been saying it will make upcoming moves based on what data say about inflation and the job market, where the worry is that too-strong growth could give inflation more fuel.

Reports on the economy Tuesday came in mixed. One said that growth in wages and benefits for U.S. workers slowed during the summer, compared with year-earlier levels, but not by as much as economists expected.

Another report said that confidence among U.S. consumers weakened last month, but not by as much as economists expected. Strong consumer spending has helped the economy avoid recession, but it could also fan inflation. That's why the Fed is nervous about too strong growth in wages, as workers fight for higher pay amid high inflation.

In other trading, U.S. benchmark crude oil advanced 10 cents to $81.12 a barrel. It lost 29 cents on Tuesday to $81.02. Brent crude, the international standard, picked up 22 cents to $85.24 a barrel.

The euro fell to $1.0574 from $1.0575.

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AP Business Writer Stan Choe contributed.