(Bloomberg) -- Asian markets were set for a tepid open Tuesday, with attention back on technology stocks and China after a surge in shares of Alibaba Group Holding Ltd.
Equity-index futures for Japan pointed to a modest gain after chip stocks pushed the Nikkei-225 index lower Monday. Contracts also indicated modest moves for Hong Kong and Australia. US equity-index futures edged lower with cash markets closed Monday for Labor Day.
Investors will also be watching Japan's 10-year government bond auction Tuesday, which will be a key test of appetite amid growing expectations of rate hikes by the Bank of Japan and mounting political uncertainty. WTI crude oil climbed in early trading while a gauge of the dollar was flat.
Wall Street's record-breaking stock rally now faces a pivotal test, with jobs numbers, inflation data and the Federal Reserve's rate call all landing within the next three weeks. Tariff tensions and questions over the Fed's independence were also compounding the risks in September, historically the weakest month of the year for US markets.
"The bar to derail a Fed rate cut on Sept. 17 appears high," Deutsche Bank AG economist Peter Sidorov wrote. "But with Fed funds futures now pricing over 140 basis points of easing by the end of 2026, markets are expecting an amount of easing that since the 1980s has only occurred around recessions."
A gauge tracking emerging-market equities notched its best session in a week amid thin liquidity due to the US holiday, boosted by artificial intelligence-related stocks in Hong Kong and China.
The MSCI EM Index closed 0.7% higher as Alibaba jumped 19% in Hong Kong -- the most in three years -- as the Chinese e-commerce giant reported a triple-digit percentage gain in AI-related product revenue as well as a better-than-anticipated 26% jump in sales from the cloud division. The rally marks a break from last week's broader Asian market decline after a tech selloff hit Wall Street.
Traders will also be closely monitoring Indonesian markets after stocks tumbled the most in nearly five months on Monday. Political risks have recently flared, with President Prabowo Subianto canceling a China trip after deadly unrest over living costs and inequality. Stress also was evident in the bond market, with yields on the nation's 10-year government note rising to the highest in almost three weeks.
In geopolitical news, President Xi Jinping is set to stage a major parade to mark 80 years since the end of World War II -- and showcase China's growing diplomatic sway and military might. Xi will deliver a speech at the parade this year.
Meanwhile, President Donald Trump said India offered to cut its tariff rates following the US imposition last week of 50% levies as punishment for its purchases of Russian oil.
In Europe, bonds weakened broadly, with a week to go before a confidence vote that could topple France's government. The French-German 10-year spread, a key measure of risk, was little changed at 79 basis points. The gauge closed at 82 on Aug. 27, the highest since January.
Longer-maturity bonds may be in for a treacherous September, if history is any guide.
Over the last decade, government bonds globally with maturities of over 10 years posted a median loss of 2% in September, according to data compiled by Bloomberg. That's the worst monthly performance of the year.
Corporate News:
Nestlé SA dismissed Chief Executive Officer Laurent Freixe after only a year due to an undisclosed workplace affair, extending the management turmoil at the world's biggest food company that's known for its conservative corporate culture. Mizuho Financial Group Inc. is aiming to become Asia's top investment bank by bolstering equity underwriting and M&A advisory, seeking to replicate the headways the firm has made in the US. Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 8:27 a.m. Tokyo time Hang Seng futures fell 0.2% S&P/ASX 200 futures were little changed Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1714 The Japanese yen was little changed at 147.07 per dollar The offshore yuan was little changed at 7.1330 per dollar The Australian dollar was little changed at $0.6556 Cryptocurrencies
Bitcoin fell 0.2% to $108,699.7 Ether rose 0.1% to $4,294.49 Bonds
Australia's 10-year yield advanced three basis points to 4.34% Commodities
West Texas Intermediate crude rose 0.9% to $64.57 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.