Asian Stocks Rise Before Fed Decision, Oil Slips: Markets Wrap

(Bloomberg) — Asian shares rose and bonds posted modest gains as investors awaited the Federal Reserve’s interest-rate decision, with markets expecting its first hike since 2023. Oil’s rally paused.

MSCI’s Asian stocks gauge climbed 0.6%, snapping a four-day losing streak. Equity-index futures for Wall Street benchmarks edged up 0.2% before Wednesday’s rate decision, while European shares were set to open higher. Traders are pricing in a more-than-90% chance the Fed will raise rates.

Treasuries consolidated, while government bonds edged up in Australia and New Zealand. A rally in energy prices — with global benchmark Brent surging about 20% this month — and growing bets on a rate hike had fueled a bond selloff, pushing the 10-year Treasury yield as high as 5.04% Tuesday, the highest in almost two decades. The yield slipped to 4.98% in Asian trading.

Some relief came as Brent dropped 0.7% to about $108 a barrel as a rally driven by supply disruptions left gains looking overdone, and a US industry report pointed to a rise in stockpiles.

The Fed is in focus after hotter-than-expected core inflation last week and concerns over government budgets bolstered bets that Chair Kevin Warsh and his colleagues will tighten monetary policy. Higher rates would come as surging energy prices threaten to keep inflation elevated, while rising bond yields increase financing costs and add another headwind for equities.

“Given the amount of tightening already factored in, and new Chair Warsh’s dislike of ‘forward guidance,’ we believe it might be difficult for the Fed to be more ‘hawkish’ than what is baked in,” said Peter Dragicevich, Asia Pacific currency strategist at Corpay Inc. “A burst of volatility is likely post the Fed announcement, and we see risks the dollar weakens after the event.”

Read: Fed Seen Hiking Rates in Defiance of Trump: Decision-Day Guide

What Bloomberg’s Strategists Say…

“There is an eerie calm across Asian markets which belies the risk events stacked up for the remainder of this week. Macro traders appear to be convinced that yields and oil prices will stay elevated, but stocks will avoid a meltdown, whatever the outcome from the FOMC, BOE and BOJ.”

— Mark Cranfield, MLive Strategist. Click here for the full analysis.

In other corners of the market, gold rose to about $4,330 an ounce after two days of losses. A Bloomberg gauge of the dollar was little changed.

Elsewhere, Bitcoin held losses to trade around $75,800 as the US Senate blocked a landmark crypto market structure bill.

Central bank decisions remain the main focus this week, with the Fed followed by policy announcements in the UK and Japan that could reshape the monetary-policy outlook for the rest of 2026.

A decision by the US central bank to hold rates — or a hike without clear guidance on further increases — may push investors to demand higher long-term yields as protection against inflation, while shorter-dated yields track the Fed’s policy path more closely.

Officials have held their benchmark rate steady in a range of 3.5%-3.75% since December as a majority of policymakers argued that progress in lowering inflation was being stalled by temporary factors.

“It will be important to hear some of the statements from Kevin Warsh to see what the expectations and the trajectory will be for the remaining few months of 2026,” Ken Wong, an Asia equity portfolio specialist at Eastspring Investment, said on Bloomberg TV.

Corporate Highlights:

OpenAI is holding early talks with investors about a fresh funding round that would value the ChatGPT creator at more than $1.2 trillion valuation ahead of an initial public offering. Meta Platforms Inc. Chief Executive Officer Mark Zuckerberg said AI labs should rely on independent evaluators and advisers to ensure that models are safe. JPMorgan Chase & Co. forecast third-quarter gains for trading revenue and investment-banking fees, a stark contrast from Bank of America Corp.’s warning earlier this week. Wells Fargo & Co. Chief Financial Officer Michael Santomassimo said that the lender’s net interest margin is expected to be better than initially expected. Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.2% as of 1:01 p.m. Tokyo time Japan’s Topix rose 0.7% Australia’s S&P/ASX 200 rose 0.3% Hong Kong’s Hang Seng rose 0.1% The Shanghai Composite rose 0.6% Euro Stoxx 50 futures rose 0.3% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1542 The Japanese yen fell 0.2% to 155.36 per dollar The offshore yuan was little changed at 6.7108 per dollar Cryptocurrencies

Bitcoin fell 0.1% to $75,769.7 Ether fell 0.2% to $2,400.73 Bonds

The yield on 10-year Treasuries declined two basis points to 4.98% Japan’s 10-year yield declined four basis points to 2.995% Australia’s 10-year yield declined six basis points to 5.36% Commodities

West Texas Intermediate crude fell 1.1% to $104.69 a barrel Spot gold rose 0.8% to $4,327.08 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Ruth Carson, Abhishek Vishnoi and Matthew Burgess.

©2026 Bloomberg L.P.