Photo/Illutration A currency trader walks near a screen showing the Korea Composite Stock Price Index (KOSPI) at a foreign exchange dealing room in Seoul, South Korea, Oct. 26, 2022. (AP Photo)

BEIJING--Asian stock markets followed Wall Street higher on Wednesday as hopes rose that the Federal Reserve might ease off plans for interest rate hikes and Britain installed its third prime minister this year.

Shanghai, Tokyo, Hong Kong and Sydney gained. Oil prices declined.

Wall Street’s benchmark S&P 500 index rose for a third day after bond prices rose, suggesting some investors expect the Fed to ease off rate hikes as economic activity cools.

Traders see weaker U.S. housing prices and other data as support for a “dial back” of Fed plans at its December meeting, said Vishnu Varathan of Mizuho Bank in a report.

The new British prime minister, Rishi Sunak, warned Tuesday of a “profound economic crisis,” but his arrival appeared to reassure rattled markets. The battered pound edged higher against the U.S. dollar.

The Shanghai Composite Index rose 1.4 percent to 3,018.59.

The Nikkei 225 in Tokyo jumped 2.4 percent to 15,531.83 ahead of the expected release of a stimulus package this week that reportedly could exceed 20 trillion yen ($140 billion).

The Hang Seng in Hong Kong advanced 1.1 percent to 27,558.75.

Sydney’s S&P-ASX 200 rose 0.1 percent to 6,807 after the government reported Australian inflation rose to 7.3 percent in the three months ending in September.

The Kospi in Seoul added 0.9 percent to 2,255.48. New Zealand and Southeast Asian markets rose.

On Wall Street, the S&P 500 gained 1.6 percent 3,859.11. The Dow Jones Industrial Average rose 1.1 percent to 31,836.74. The Nasdaq advanced 2.3 percent to 11,199.12.

Tech stocks, retailers and communication companies were among the biggest drivers.

Investors are looking at corporate results to see how inflation that is at multidecade highs is affecting consumer spending.

General Motors rose 3.6 percent after delivering solid results. United Parcel Service slipped 0.3 percent after the package delivery service beat earnings and revenue forecasts.

The yield on the 10-year Treasury, which influences mortgage rates, slipped to 4.09 percent from 4.23 percent late Monday. The yield on the two-year Treasury, which tracks Federal Reserve action, fell to 4.45 percent from 4.50 percent late Monday.

The Federal Reserve and central banks around the world have been raising interest rates to slow economic growth and reduce pressure for prices to rise. Investors worry that might tip the global economy into recession.

Traders have become more confident the Fed will reduce its rate hike plans from three-quarters to half a percentage point at its December meeting, according to CME Group.

The U.S. economy is already slowing down and actually contracted during the first half the year. The government will release its third-quarter gross domestic product report on Thursday.

In energy markets, benchmark U.S. crude lost 41 cents to $84.91 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 74 cents to $85.32 on Tuesday. Brent crude, the price basis for international oil trading, shed 58 cents to $91.16 per barrel in London. It gained 26 cents the previous session to $93.52.

The dollar gained to 148.25 yen from Tuesday’s 147.97 yen. The euro declined to 99.58 cents from 99.66 cents.

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