Asian markets rose again Thursday after soft US and European economic data soothed recent fears that central banks will hike rates further, while tech firms were given a boost by forecast-busting earnings from AI chip titan Nvidia.
Traders have spent most of August fretting that the Federal Reserve will be forced to tighten monetary policy further owing to a string of reports pointing to a resilient US economy and jobs market.
But news that the country's factory activity continued to shrink in August while the key services sector was weaker than predicted was seen as allowing policymakers to take a step back, with borrowing costs already at a two-decade high.
Expectations for jobs growth in August were also scaled back, providing some much-needed relief to investors, while US Treasury yields retreated from around 15-year highs.
The picture in the eurozone was equally poor, with the purchasing managers indexes for manufacturing and services both contracting.
"In terms of PMIs in the US and Europe, it's good news for the market because they are now expecting no more rate hikes in the future," said Grace Tam, at BNP Paribas Wealth Management, on Bloomberg Television.
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The figures come as Fed chief Jerome Powell and European Central Bank head Christine Lagarde prepare to make speeches at a keenly followed annual gathering of central bankers and business leaders at Jackson Hole, Wyoming on Friday.
Redmond Wong, at Saxo, said: "This may be another reason for Powell to stay away from committing to further rate hikes but continue to highlight a data-dependent approach."
Krishna Guha, of Evercore ISI, added: "The recent surge in bond yields has pushed up mortgage and corporate borrowing rates, contributed to the fall in stock prices, and generated upward pressures on the dollar.
"The Fed will have to consider the tightening in financial conditions when setting rates in coming months, including the decision on whether to hike in September."
Wall Street's three main indexes soared, with the S&P 500 and Nasdaq up more than one percent.
The gains were supported by a rally across big-name tech firms including Amazon and Apple, which came ahead of the release of earnings from Nvidia that were tipped to beat the firm's forecasts.
And the Silicon Valley giant did not disappoint after the US close, reporting a mind-boggling 843 percent jump in net profit to $6.2 billion thanks to the growing demand for all things AI.
Shares of Nvidia surged more than eight percent in after-hours trading.
And the positive vibes filtered through to Asia, where Hong Kong led gainers by rising more than one percent, while Shanghai, Tokyo, Sydney, Seoul, Singapore, Manila and Jakarta also rose.
Key figures around 0230 GMT
Tokyo - Nikkei 225: UP 0.4 percent at 32,146.33 (break)
Hong Kong - Hang Seng Index: UP 1.1 percent at 18,039.77
Shanghai - Composite: UP 0.1 percent at 3,082.54
Dollar/yen: UP at 145.06 from 144.80 yen on Wednesday
Euro/dollar: DOWN at $1.0860 from $1.0868
Pound/dollar: DOWN at $1.2709 from $1.2727
Euro/pound: UP at 85.45 pence from 85.40 pence
West Texas Intermediate: DOWN 0.5 percent at $78.53 per barrel
Brent North Sea crude: DOWN 0.4 percent at $82.90 per barrel
New York - Dow: UP 0.5 percent at 34,472.98 (close)
London - FTSE 100: UP 0.7 percent at 7,320.53 (close)