BANGKOK – Shares advanced Wednesday in Asia after the U.S. stock market rallied to records when data showed inflation across the United States improved slightly last month.

Tokyo’s benchmark Nikkei 225 added to its record set a day earlier. Shares in Hong Kong, Singapore and Malaysia also gained more than 1%.

The recent rally in share prices has been driven partly by relief over an extended truce in President Donald Trump’s trade war with China, and partly by persisting hopes the Federal Reserve will cut interest rates. Those were reinforced by a moderation in the consumer price index in July.

“Asia woke up in full risk-on mode, riding the coattails of a U.S. session that looked like someone hit the ‘infinite bid’ button after CPI didn’t blow the inflation doors off,” Stephen Innes of SPI Asset Management said in a commentary.

China and the U.S. agreed to extend by 90 days the pause in drastically higher tariff rates to allow more time for talks on a broad trade agreement. Although uncertainty over what the negotiations will yield remains, the truce has relieved pressure on companies and countries across Asia that rely heavily in supply chains routed through China.

Hong Kong’s Hang Seng surged 1.9% to 25,439.91, while the Shanghai Composite index added 0.6% to 3,686.34.

In Japan, relief over the Trump administration’s confirmation that its exports will face a flat 15% U.S. import duty has driven strong buying of computer chip-related companies and other exporters.

The Nikkei 225 gained 1.6% to 43,407.46.

Elsewhere in Asia, South Korea’s Kospi advanced 0.8% to 3,215.43. In Australia, the S&P/ASX 200 shed 0.5% to 8,840.30.

Taiwan’s Taiex was up 0.8% and the Sensex in India gained 0.4%. In Bangkok, the SET climbed 0.9%.

On Tuesday, the S&P 500 rose 1.1% to top its all-time high set two weeks ago. It closed at 6,445.76.

The Dow Jones Industrial Average climbed 1.1% to 44,458.61, while the Nasdaq composite jumped 1.4% to set its own record of 21,681.90.

Intel’s stock rose 5.6% after Trump said its CEO has an “amazing story,” less than a week after he had demanded Lip-Bu Tan’s resignation.

Circle Internet Group, the company behind the popular USDC cryptocurrency that tracks the U.S. dollar, climbed 1.3% despite reporting a larger loss for the latest quarter than analysts expected. It said its total revenue and reserve income grew 53% in its first quarter as a publicly traded company, which topped forecasts.

The better-than-expected report on inflation raised hopes the Federal Reserve will have the leeway to cut interest rates at its next meeting in September.

Tuesday’s report said U.S. consumers paid prices for groceries, gasoline and other costs of living that were overall 2.7% higher in July than a year earlier. That’s the same inflation rate as June’s, and it was below the 2.8% that economists expected.

Lower rates would give a boost to investment prices and to the economy by making it cheaper for U.S. households and businesses to borrow to buy houses, cars or equipment. President Donald Trump has angrily been calling for cuts to help the economy, often insulting the Fed’s chair personally while doing so.

The Fed has hesitated, worried that Trump’s tariffs could make inflation much worse.

The Fed will get one more report on inflation and another on the U.S. job market, before its next meeting, which ends Sept. 17. The most recent jobs report was a stunner, coming in much weaker than economists expected.

Critics say the broad U.S. stock market is looking expensive after its surge from a bottom in April. That’s putting pressure on companies to deliver continued growth in profit.

In other dealings early Wednesday, U.S. benchmark crude oil edged 4 cents higher to $63.21 per barrel. Brent crude, the international standard, was up 8 cents at $66.20 per barrel.

The U.S. dollar rose to 147.94 Japanese yen from 147.84 yen. The euro climbed to $1.1686 from $1.1677.

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AP Business writers Stan Choe and Matt Ott contributed.