Australia

Australian shares are set to rise today following a strong session across global markets. The technology sector led stock indices higher worldwide, as both consumer and producer prices confirmed that US inflation is slowing. Investors hoped that the latest economic data will convince the Federal Reserve to wrap up its aggressive policy-tightening campaign.

ASX futures were 41 points or 0.6% higher as of 6:00am on Friday, indicating a positive open.

US stocks marched higher Thursday after investors received data -- for a second consecutive day -- showing that inflation is moderating to its slowest pace in years.

The Labor Department reported the producer-price index (PPI) rose in June at a weaker clip than economists expected. That followed Wednesday's report that showed consumer inflation fell to multiyear lows.

Investors continued piling into big tech stocks, encouraged by signs that the worst of the inflation fight is over and the economy remains strong. Amazon.com jumped 2.7% on the back of its Prime Day sale, while chip-maker Nvidia added 4.7%. The 2.3% rise in the communication services sector led the S&P 500, followed by information technology.

Shares of Google parent Alphabet were among the market's best performers, rising 4.7% after updating its Bard chatbot. That helped power the Nasdaq Composite to a 1.6% gain, while the S&P 500 added 0.9%. The blue-chip Dow Jones Industrial Average edged up 47.71 points, or 0.1%. Canadian stocks also gained, with the S&P/TSX index advancing 1.1%.

In commodity markets, Brent crude oil added 1.9% to US$81.63 a barrel while gold leaned 0.1% higher to US$1,960.14.

Australian government bonds were lower, with the 2 Year yield dipping to 4.02% and the 10 Year yield declining to 4.05%. US Treasury notes were also slightly lower, with the 2 Year yield inching down to 4.62% and the 10 Year yield decreasing to 3.77%.

The Australian dollar jumped to 68.87 US cents from its previous close of 67.85. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, slipped to 94.59.

Asia

Chinese shares ended higher after China's premier met with senior executives of the country's tech giants, signaling an end to the years-long crackdown on the sector. Optimism over Wednesday's meeting more than offset concerns about Chinese exports' deeper decline in June amid weakening global demand. Gains were broad-based, led by hardware makers and financials. Foxconn Industrial Internet rose by the daily limit of 10% and Naura Technology Group added 1.8%. Huatai Securities was 3.2% higher. The benchmark Shanghai Composite Index climbed 1.3% to 3236.48, the Shenzhen Composite Index rose 1.4% and the tech-heavy ChiNext Price Index increased 1.85%.

Hong Kong stocks ended the session sharply higher. The benchmark Hang Seng Index jumped 2.6%, its biggest one-day percentage gain in over a month, to settle at 19350.62. Tech companies led gains, as the sector rallied on supportive signals from Beijing officials. The June US CPI report, which indicated cooling inflation and eased worries about the Fed's tightening plans, also contributed to the session’s hopeful sentiment. JD Health soared 8.2%, Kuaishou advanced 7.9% and Bilibili was up 7.5%.

Japan's Nikkei Stock Average rose 1.5% to close at 32419.33 on the lessened likelihood of further Fed rate increases following softer-than-expected US inflation data. Rate expectations remain well-anchored for a last 25bp hike by the Fed this month, and the case has strengthened for a prolonged pause in tightening thereafter, Yeap Jun Rong, market analyst at IG, said in an email. Among the best performers on the index, Recruit Holdings climbed 6.8%, M3 added 5.2% and Daiichi Sankyo was up 5.2%.

Indian shares rose, led by gains in tech stocks, as hopes continued for earnings growth and concerns over the Fed's further tightening eased. The benchmark Sensex index closed 0.25% higher at 65558.89. Tata Consultancy Services rose 2.5% after saying Wednesday that 1Q net profit climbed 17% on year. Infosys advanced 2.4%. Wipro added 0.7% after it posted higher 1Q profit.

Europe

European stocks rallied as investors took heart from more data suggesting a softening of inflationary pressures. The pan-European Stoxx Europe 600 advanced 0.6%, the French CAC 40 rose 0.5% and the German DAX climbed 0.7%. Watch suppliers and tech stocks were among the continent’s biggest risers.

"US stocks have risen and Europe got a boost Thursday as new data on producer prices indicated a cooling of US inflation," IG analyst Chris Beauchamp wrote. "The labor market remains solid, but with prices easing, investors are allowing themselves to contemplate the possibility that Fed Chair Jerome Powell may actually achieve his goal of bringing down inflation without tipping the economy into recession."

The British FTSE 100 index gained 0.3% on Thursday, to 7440 points, amid positive trading throughout global markets. ConvaTec led the index’s top risers, closing up 2.9%, followed by Glencore and Entain, up 2.5% and 2.2% respectively.

North America

US stocks marched higher Thursday after investors received data -- for a second consecutive day -- showing that inflation is moderating to its slowest pace in years.

The Labor Department reported the producer-price index (PPI) rose in June at a weaker clip than economists expected. That followed Wednesday's report that showed consumer inflation fell to multiyear lows.

Investors continued piling into big tech stocks, encouraged by signs that the worst of the inflation fight is over and the economy remains strong. Amazon.com jumped 2.7% on the back of its Prime Day sale, while chip-maker Nvidia added 4.7%. The 2.3% rise in the communication services sector led the S&P 500, followed by information technology.

Shares of Google parent Alphabet were among the market's best performers, rising 4.7% after updating its Bard chatbot. That helped power the Nasdaq Composite to a 1.6% gain, while the S&P 500 added 0.9%. The blue-chip Dow Jones Industrial Average edged up 47.71 points, or 0.1%. Canadian stocks also gained, with the S&P/TSX index advancing 1.1%.

"The disinflation narrative is in full effect," said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. For investors, that means "buying stocks and bonds is the best course of action," he said, contrary to last year when both suffered from the Federal Reserve's interest rate campaign.

Wall Street is eager to see second-quarter results from the six largest banks over the next few days, with JPMorgan Chase, Citigroup and Wells Fargo slated for Friday morning. Earnings from UnitedHealth Group, a healthcare industry bellwether, are also on tap for Friday.

Shares of financial services companies have limped along since the March banking crisis. The KBW Nasdaq Bank Index has declined 16% this year while the S&P 500 is up 17% over the same period -- that is the worst bout of underperformance on record, according to a Barclays analysis that goes back to 1937. Analysts will be gleaning earnings for insight into how bank have recovered from March's events.

The Cboe Volatility Index, or the VIX, finished below 14, a historically low level associated with complacency. The index is commonly referred to as Wall Street's fear gauge as it measures the price of options often used to protect against market declines. Anxiety is near record lows now that investors have grown confident that the Fed's forthcoming rate hike could be its last.

Not everyone on Wall Street is convinced the market rally has room to run. This is prototypical late-cycle behavior, said Amanda Agati, chief investment officer of PNC Asset Management Group. With interest rates expected to remain higher for longer, a recession is a foregone conclusion, she said.

"I can't think of any instances where the market has bottomed this far ahead of a potential recession," said Agati. "Inflation still isn't at the Fed's target, but the market is declaring victory."

Agati sees potential for a 10% to 15% correction in stock prices from here, airing concerns about the megacap-tech-led rally. To be sure, there is room for optimism: Any recession is likely to be shallow, she said, and markets will take off once investors feel corporate earnings are nearing a trough.

PNC is keeping clients fully invested rather than sitting in cash to avoid missing out if and when there is a rebound down the line, she said. Meanwhile, the firm is leaning into what she called quality stocks -- shares of highly profitable companies with steady earnings growth and low debt -- and high-grade bonds.