A divided Federal Reserve, AI-driven market jitters, and Middle East tensions kept global investors on edge.
Asian markets traded unevenly on Thursday as investors struggled to find direction after a turbulent week. The Federal Reserve left interest rates unchanged, but offered little clarity on its next move, while concerns over AI spending and rising geopolitical tensions continued to fuel volatility.
KEY DETAILS
The Fed held rates steady, but disagreement among policymakers left markets uncertain about whether another rate hike could come as soon as September. Fed funds futures now price in roughly a 60% chance of a hike at the next meeting and 33 basis points of tightening by year-end.
Long-term U.S. Treasury yields climbed to their highest levels in nearly 19 years, with the 30-year yield reaching 5.2273%.
Asian chip stocks remained under pressure after South Korea's recent market selloff erased more than $2 trillion in value. The KOSPI fell 0.6% and is heading for a weekly decline of about 15%, despite Samsung Electronics reporting a 19-fold jump in second-quarter operating profit.
Brent crude slipped back below $90 a barrel after surging more than 7% the previous day as fighting in the Middle East intensified.
MARKET REACTION
Japan's Nikkei rose 1.2%, while the broader MSCI Asia-Pacific index outside Japan was little changed after swinging between gains and losses. Nasdaq futures gained 0.7%, helped by Microsoft's strong outlook, while Meta shares came under pressure after reporting a 91% drop in second-quarter free cash flow.
WHY IT MATTERS
Traders are balancing several major risks at once, including uncertain U.S. monetary policy, rising bond yields, pressure on AI-related stocks, and escalating geopolitical tensions. These factors could keep markets volatile in the weeks ahead.
Investors will closely watch upcoming U.S. economic data, Fed signals, and developments in the Middle East to gauge the direction of interest rates and global markets.
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Source: Reuters
Time: 12:00 PM EEST
