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Asian stocks set for cautious gains on Sino-U.S. trade hopes

WASHINGTON (Reuters) - Asian stock were set for a choppy session on Wednesday, following a mixed Wall Street lead as markets cheered signs of progress in U.S.-Sino trade negotiations but remained cautious about the broader economic outlook.

FILE PHOTO: Employees of the Tokyo Stock Exchange (TSE) work at the bourse in Tokyo Japan, October 11, 2018. REUTERS/Issei Kato

Top U.S. and Chinese officials reaffirmed their commitment to a trade deal that had appeared on shaky ground because of worsening bilateral ties following weeks of escalating tensions between the world’s two largest economies.

The euro rose and gold prices fell as positive signals on the Washington-Beijing trade front bolstered risk sentiment and offset support for the metal from a weaker dollar.

Trading volume was typically low for late August and investors await a speech by Federal Reserve Chairman Jerome Powell on Thursday, when he is expected to address the U.S. central bank’s view on inflation and monetary policy.

“As the U.S. equity market continues to climb to all-time highs with the usual suspects leading the way (e.g. Tech, Communication Services and Amazon), we expect the momentum to continue,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.

“As the Federal Reserve’s liquidity has provided fuel for the fire, the concentration of the top five largest stocks in the S&P 500 index gives us some pause,” Zaccarelli added.

Powell may signal a shift in the Fed’s inflation target to an average, which would allow inflation to rise more quickly than in the past.

On Wall Street, trading was mixed with the S&P 500 .SPX up 0.36%, the Nasdaq Composite .IXIC adding 0.76%, both hitting all-time closing highs.

The Dow Jones Industrial Average .DJI, which has yet to reclaim its February high, ended the session lower, however, falling 0.21%.

A slide of 0.82% in Apple Inc. AAPL.O, whose market capitalization of $2.15 trillion is greater than all the components in the benchmark FTSE 100 .FTSE index in London, initially kept stocks from rising.

A survey from the Conference Board showed U.S. consumer confidence unexpectedly fell in August to hit a six-year low.

Australian S&P/ASX 200 futures YAPcm1 were down 0.55%, while Japan's Nikkei 225 futures NKc1 were up 0.09%. Hong Kong's Hang Seng index futures .HSI.HSIc1 were up 0.1%.

Emerging market stocks rose 0.59%.

Investors have also cheered signs researchers might be closer to a treatment for coronavirus.

British drugmaker AstraZeneca AZN.L has begun trials of its antibody-based drug for the treatment and prevention of COVID-19, the latest development in a global race to combat the pandemic.

The dollar index =USD fell 0.274%, with the euro EUR= down 0.03% to $1.183.

The Japanese yen strengthened 0.03% versus the greenback at 106.36 per dollar, while Sterling GBP= was last trading at $1.3146, down 0.03% on the day.

Crude oil prices rose, supported by production cuts in the U.S. Gulf Coast as Tropical Storm Laura was forecast to become a major hurricane, while rising coronavirus cases in Asia and Europe capped gains.

U.S. crude CLc1 recently rose 0.09% to $43.39 per barrel and Brent LCOc1 was at $46.05, up 2.04% on the day.

Longer-term U.S. Treasury yields rose as traders moved into riskier asset classes on reassurance that a U.S.-China trade deal would continue. Yields on the benchmark 10-year Treasury note US10YT=RR rose 0.6883%, from 0.682%.

Spot gold XAU= added 0.1% to $1,928.83 an ounce. U.S. gold futures GCc1 % to $1,911.80 an ounce.

Reporting by Katanga Johnson; Editing by Sam Holmes