Asian shares track Wall Street higher, Treasury yields near multi-decade highs

Asian shares followed the lead of Wall Street on Tuesday, as the Nasdaq hit a record high after a tech-driven rally. Despite a slight decline in oil prices, longer-dated Treasury yields remained near multi-decade highs. The euro weakened near 17-month lows due to fiscal concerns in France. French government bonds saw heavy selling following a disappointing budget, and political uncertainty increased after Spanish Prime Minister Pedro Sanchez announced a snap election.

Brent crude stayed flat at $100 a barrel after falling 1.9 percent the previous day, as increased Middle East exports and a G7 pledge to boost supplies fueled the market. MSCI's Asia-Pacific index excluding Japan climbed 0.2 percent, while Japan's Nikkei rose 0.7 percent.

European stock futures gained 0.5 percent. Meanwhile, the Nasdaq added 0.2 percent and S&P 500 futures increased 0.1 percent. The tech-heavy index reached a record close due to soft jobs data, which reduced expectations for a Federal Reserve rate hike this month. AI powerhouse Nvidia soared 2.1 percent, achieving a record-high close and a market value of $5.76 trillion.

The bullish market trend was driven by tech companies' strong earnings growth and reduced interest rate uncertainty. Goldman Sachs predicted that S&P 500 earnings in the third quarter would grow by 27 percent, with more than half attributed to AI infrastructure spending.

Latin American markets also advanced, led by Brazilian stocks and the real currency, following the unexpected victory of right-wing Senator Flavio Bolsonaro in the first round of the presidential election. In the bond market, Treasury yields remained elevated, with the US 10- and 30-year yields hitting fresh 24-year highs. The euro weakened to $1.1215, its weakest level since May 2025, and hovered around 177 yen.

Deep divisions in French politics raised concerns about potential fiscal consolidation dilution or a no-confidence vote in the government.