Asia Stocks Erase Loss, Bonds Fall on US Inflation: Markets Wrap
(Bloomberg) — Asian stocks erased early declines after dip buyers stepped in following early weakness in chipmakers. Bonds fell after US inflation accelerated, fueling speculation the Federal Reserve will raise interest rates next year.
MSCI’s Asia Pacific equities gauge gained 0.3%, reversing a loss of as much as 0.6%. South Korea’s Kospi, a bellwether for chips and artificial intelligence, climbed 0.9%, after earlier dropping 3%. Nvidia Corp. shares rose more than 2% on an alternate trading platform after the White House said the company’s chief executive officer would join President Donald Trump’s trip to China.
US equity-index futures also swung to a gain after the underlying gauges dropped Tuesday following the US inflation data and as chipmakers lost momentum following a record-breaking rally. Brent crude oil fell 0.8% to about $107 a barrel after a three-day rally.
The faster-than-estimated rise in the core US consumer price index pushed up two-year Treasury yields to almost 4% and the 30-year yield to 5.03%. Government bonds dropped in Japan and Australia.
Elevated oil prices and mounting inflation risks are threatening to derail the blistering rebound in equities from their war-driven lows, a rally fueled by gains in semiconductor stocks and robust earnings from megacap technology companies. The run-up in chipmakers has already sparked calls for a pause, amid concerns valuations have surged too far, too fast on expectations that heavy spending on AI will translate into profits.
“Strong US CPI raises the possibility of a more hawkish stance from the Fed, with rising US yields seen as a headwind for equities,” said Kazunori Tatebe, chief strategist at Daiwa Asset Management in Tokyo. “It’s concerning that this could intensify pressure on growth stocks, such as AI and semiconductors, which have been leading the market.”
US inflation quickened in April on rising gasoline and grocery costs, exceeding wage growth in a double-whammy for already strained consumers. CPI rose 3.8% from a year earlier, the most since 2023. The core gauge, which excludes food and energy, increased 2.8%.
“Inflation is roaring back — largely driven by stubbornly high oil prices — which will dominate the inflation story for the rest of the year as the conflict continues to unfold in the Middle East,” said Skyler Weinand at Regan Capital.
The flip side is that markets had already priced out rate cuts for 2026 heading into the report, said Tim Urbanowicz at Innovator ETFs from Goldman Sachs Asset Management.
As long as the 10-year Treasury yield remains contained below 4.5%, it shouldn’t be a meaningful headwind for equities, he added.
On the geopolitical front, President Donald Trump said he would prioritize trade discussions during his summit with Chinese counterpart Xi Jinping this week, and downplayed the amount of attention they would devote to the Iran war.
Traders have ramped up wagers the yuan will strengthen in coming days in a bet that the meeting will support a trade truce between the nations.
Elsewhere, UK bonds tumbled amid a political drama that’s adding pressure to a market already battered by the country’s fiscal issues. Prime Minister Keir Starmer survived in post into Tuesday evening despite a slew of ministerial resignations which have so far failed to force his downfall.
Corporate News:
Anthropic PBC is in early talks with investors to raise at least $30 billion in fresh financing, according to people familiar with the matter, setting the stage for what could be its largest funding round yet. Samsung Electronics Co. and its labor union failed to reach a last-minute wage agreement, according to the Yonhap news service, heightening the risk of a strike that could disrupt operations. Cerebras Systems Inc. is guiding prospective investors that it expects to price its initial public offering above the top of its marketed range. Pop Mart International Group Ltd. reported slower sales growth for the first quarter, marking a deceleration from its rapid expansion last year amid waning momentum for its blockbuster Labubu toys. Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 10:48 a.m. Tokyo time Nikkei 225 futures (OSE) rose 0.7% Japan’s Topix rose 1.2% Australia’s S&P/ASX 200 fell 0.2% Hong Kong’s Hang Seng was little changed The Shanghai Composite was little changed Euro Stoxx 50 futures fell 1.5% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1741 The Japanese yen was little changed at 157.59 per dollar The offshore yuan was little changed at 6.7900 per dollar Cryptocurrencies
Bitcoin rose 0.5% to $81,070.34 Ether rose 0.3% to $2,291.48 Bonds
The yield on 10-year Treasuries was little changed at 4.46% Japan’s 10-year yield advanced five basis points to 2.595% Australia’s 10-year yield advanced five basis points to 5.08% Commodities
West Texas Intermediate crude fell 0.6% to $101.58 a barrel Spot gold fell 0.2% to $4,707.92 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rob Verdonck and Momoka Yokoyama.
©2026 Bloomberg L.P.
