Global stocks held onto their three-day gains to approach a new record high after the US House of Representatives passed a bill to end the longest government shutdown in US history.

Asian stocks and the MSCI World Index fluctuated between slight gains and losses, as investors remained cautious due to limited economic data overshadowing expectations for Federal Reserve policy.

S&P 500 futures rose 0.1% in Asian trading after the benchmark index posted four straight sessions of gains, supported by optimism that a resolution to the lockdown is imminent.

The Japanese yen stabilizes after government warnings.

The Japanese yen was in focus after Finance Minister Satsuki Katayama issued a fresh warning about currency movements, as the yen settled around 155 against the dollar, nearing levels where the government last intervened in the market.

In energy markets, oil prices stabilized after falling at their fastest pace since June, after the Organization of the Petroleum Exporting Countries (OPEC) said that global crude supplies had outpaced demand earlier than expected.

Brent crude fell to around $62 a barrel after losing nearly 4% in the previous session, while West Texas Intermediate crude settled near $58. Energy stocks in Australia declined.

The focus shifts to the Federal Reserve

As the US corporate earnings season draws to a close, market focus has shifted to the Federal Reserve and expectations of an interest rate cut. The absence of key data, such as the October unemployment figures and consumer price index, has increased uncertainty surrounding monetary policy, especially after the White House indicated that these reports might not be released due to the holiday.

Michael Landsberg of Landsberg Bennett Private Wealth Management said: “While markets are pricing in the end of the government shutdown, there’s a bigger mountain ahead of us in the form of resuming the release of the economic data we missed. As the fog clears, we’ll know whether the market was right, or whether a major repricing will be necessary.”

Temporary funding law passed to end longest shutdown

After a six-week standoff between US President Donald Trump and congressional Democrats that disrupted flights and delayed food aid for millions of people, the shutdown ended after the House of Representatives passed a temporary funding bill.

The House of Representatives voted Wednesday evening by a margin of 222 to 209 in favor of the bill, but a full government shutdown after the longest in the country's history could take several days to fully resume operations. Trump signed the bill Wednesday evening in Washington to reopen the government.

Difficulty in assessing the economy and renewed expectations of interest rate cuts

Seema Shah of Principal Asset Management said the real challenge lies not in the short-term impact on growth, but in the increasing difficulty for investors and the Federal Reserve to assess the economic outlook in the absence of data.

She added: With the resumption of data releases, momentum will return toward an interest rate cut in December, which will bolster the risk-on environment. This situation is favorable for US stocks, particularly large technology companies and cyclical sectors that will benefit from a more accommodative monetary policy.

In contrast, Boston Federal Reserve President Susan Collins said she would prefer to keep interest rates steady given continued strong growth that could hinder progress in reducing inflation.

Collins, who has a voting seat on the Monetary Policy Committee this year, explained that last month's interest rate cut, the second in a row, was a wise move to support a labor market that is showing signs of weakness in employment.

She noted that the current interest rate, between 3.75% and 4%, remains slightly constrained, which she considers appropriate given that inflation remains above the Fed's 2% target.

Elsewhere, Australian shares continued their decline, while short-term bond yields jumped after jobs data came in stronger than expected, reducing expectations of an interest rate cut by the Reserve Bank of Australia.