On Wednesday (July 17th), Asian stock markets rose, joining the ranks of the global rebound, as bets on the Federal Reserve's upcoming interest rate cuts sparked an influx of high-risk markets.

The stock indices of Japan and Australia climbed, while the South Korean stock market remained stable after reaching a new high in the US stock market, pushing global stock markets to reach a new peak.

Risk appetite sentiment is rising, and the market is optimistic that the Federal Reserve will soon cut interest rates, as US retail sales data shows consumer resilience, fueling hopes for a soft landing. This sentiment has driven a rotation towards small cap stocks - the Russell 2000 Index has risen 12% in the past five trading days, its best performance since April 2020.

With the rise of the Russell 2000 Index in the United States, Japan's small cap stocks will also strengthen today, "said Mitsushige Akino, President of Ichiyoshi Asset Management.

The yields of Australia and Japan followed the overnight decline of their US counterparts. In early Wednesday trading, the yield of US treasury bond bonds rose slightly in the Asian market, and the yield of 10-year treasury bond bonds rose by one basis point after falling on Tuesday. As the mixed inflation data makes the prospect of interest rate reduction more uncertain, the yield of New Zealand's treasury bond bonds rose slightly, and the New Zealand dollar also rose.

The US dollar has not changed much. Earlier on Wednesday, the Japanese yen fell for the third consecutive day against the US dollar.

In Asia, expected economic data releases include Singapore's export data and Indonesia's currency decisions. The Indian and Pakistani markets are closed.

Solita Marcelli from UBS Global Wealth Management stated that if the Federal Reserve can significantly reduce interest rates in the context of a soft landing, there will be better prospects for profit growth in low-quality and cyclical market segments.

Some Wall Street economists warn that the Federal Reserve is waiting too long to reverse policy after raising interest rates to a 20-year high. Meanwhile, the International Monetary Fund has warned that inflation in many major economies is cooling slower than expected, implying that keeping interest rates at higher levels for "longer periods of time" may pose potential risks to global growth.

EToro's Bret Kenwell stated that the strong performance of the stock market is due to the economy withstanding the most severe impact of the Federal Reserve's tightening policies. In this regard, Tuesday's better than expected retail sales report is a 'healthy' development. He pointed out that it is better for the Federal Reserve to cut interest rates when inflation is declining than to hastily support the economy when it is weak.

Janney Montgomery Scott's Dan Wantrobski stated that although the increase in the Russell 2000 Index is bullish, investors should be prepared for potential profit taking in the coming trading days.

The long-term monthly chart of the Russell 2000 Index shows a better picture of its potential, "he pointed out." We believe that the Russell 2000 Index can return to its historical high, as the mean regression of relative strength highlights the sector's potential for further expansion relative to this year's large cap stocks, "he said.

In terms of commodities, gold prices rose nearly 2% on Tuesday before further climbing, hitting a historic high of $2482 for the day before slightly falling back to around 2465. US WTI crude oil prices fell for the fourth consecutive day.