HONG KONG (AP) — Asian shares advanced Monday following Wall Street gains last week that were buoyed by hopes for early interest rate cuts.

U.S. futures were higher and oil prices gained as the Israeli military announced late Sunday that it had encircled Gaza City and cut the besieged coastal strip in two, fueling investors’ fears of a deepening conflict.

South Korean stocks surged 4.2% to 2,469.21, after the government restored a ban on short-selling, aiming to prevent illegal use of the trading tactic that is often used by hedge funds and investors. Short-selling refers to selling borrowed shares to profit from price declines.

Japan’s Nikkei 225 index gained 2.4% to 32,720.52.

However, the country’s services activity in October expanded at its slowest pace this year, raising concerns about weakness in a key sector driving Japanese economic activity.

The Hang Seng in Hong Kong added 1.7% to 17,962.64 and the Shanghai Composite index was up 0.9% at 3,057.50. Australia’s S&P/ASX 200 rose 0.4% to 7,004.50. India’s Sensex was 0.6% higher and Bangkok’s SET gained 0.3%.

Wall Street steamrolled higher Friday as it closed out its best week in nearly a year.

The S&P 500 climbed 0.9%, to 4,358.34. It rose every day last week. The Dow Jones Industrial Average gained 0.7% to 34,061.32, and the Nasdaq composite jumped 1.4% to 13,478.28.

Stocks surged on rising hopes the Federal Reserve is finally done with its market-crunching hikes to interest rates, meant to get inflation under control. A report on Friday underscored that pressure is easing on inflation after it showed employers hired fewer workers last month than economists expected.

Strong profit reports helped drive some stocks to towering gains. Generac, a maker of backup generators, soared nearly 28% for its best week since its stock began trading in 2010. At Expedia Group, another stronger-than-forecast report sent its stock nearly 22% higher for its best week since the market was surging out of the early 2020 coronavirus crash.

Stock have struggled under the weight of rapidly rising Treasury yields. Those yields were in turn catching up to the Fed’s main interest rate, which is above 5.25% and at its highest level since 2001.

Higher rates and yields slow the economy, hurt prices for investments and raise the risk of something breaking within the financial system.

In the bond market, Treasury yields tumbled just after the jobs report, releasing more of the pressure that had built up on Wall Street. The yield on the 10-year Treasury eased to 4.58% early Monday from its highest level since 2007, at more than 5%, two weeks earlier.

A separate report on Friday said growth in U.S. services industries, such as finance and construction, was weaker last month than economists expected.

Despite reporting stronger-than-expected profits, Apple, the most influential stock on Wall Street, fell 0.5%. Analysts said investors were likely disappointed with Apple’s forecast for revenue for the last three months of 2023.

A barrel of benchmark U.S. oil rose 45 cents to $80.96 in electronic trading on the New York Mercantile Exchange. It fell $1.95 to $80.51 per barrel Friday. Brent crude, the international standard, gained 39 cents to $85.28 per barrel.

In currency trading, the U.S. dollar rose to 149.58 Japanese yen from 149.37 yen. The euro cost $1.0739, up from $1.0728.