Asian Stocks to Rise on Fed Rate Signal, Oil Gains: Markets Wrap

(Bloomberg) — Asian stocks looked set to gain after US equities recovered from session lows on signs the Federal Reserve may not need to raise interest rates aggressively next year. American crude extended its rally.

Equity-index futures for Japan and South Korea advanced, while those for Australia edged lower. The S&P 500 pared earlier losses to close little changed after New York Fed President John Williams said he continued to see one more rate hike as appropriate this year but no need for further tightening in 2027. A selloff in chipmakers eased and Microsoft Corp. rose to a record.

Treasuries rallied and the dollar fell in the New York session, with traders looking to Wednesday’s US consumer price inflation data for further clues on the path of interest rates.

US oil rose 0.6% to about $94.70 a barrel, extending its advance to a fifth session, as a flare-up in Middle East attacks increased uncertainty over a recovery in energy shipments from the Persian Gulf.

Williams’ comments offered some relief ahead of the key inflation data, with markets concerned that elevated oil prices could keep price pressures persistent. Traders are also looking to earnings for clues on the direction of the artificial intelligence trade, which has come under pressure amid doubts that billions of dollars in spending will deliver commensurate returns.

Higher gasoline costs probably pushed headline inflation higher in September, while an easing in underlying price pressures may give policymakers more room to wait before tightening further.

“Confirmation that underlying inflation moderated last month would allow the Fed to approach the timing of its next rate hike with patience rather than urgency,” said Ian Lyngen at BMO Capital Markets.

Read: Waller Says Higher Treasury Yields Can Help Fed Cool Demand

As the US earnings season got underway, JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. set a fresh record in the third quarter for how much they earned from lending, with customers continuing to borrow even as interest rates increased.

At Goldman Sachs Group Inc., equity traders beat expectations, while fixed-income and rates trading fell well short of Wall Street estimates.

Elsewhere, Indian stocks will be in focus after Finance Minister Nirmala Sitharaman said she’s keen to listen to discussions around a transaction tax imposed on trading shares as the country seeks to boost capital inflows.

The Nifty 50 extended gains as she spoke Tuesday, closing 1.6% higher in its biggest advance in more than two months.

In Japan, the yen was little changed in early trading after people familiar with the matter said Bank of Japan officials are leaning against a rare back-to-back interest-rate increase this month, while keeping open the possibility of another move as soon as December.

Meanwhile, US stocks have proved resilient despite the broader concerns weighing on markets.

The S&P 500 Index hasn’t suffered a 1% decline in 53 trading sessions through Tuesday, marking the longest such stretch since January 2020, data compiled by Bloomberg show.

“Such a long streak of tranquility is certainly surprising, given all of the renewed fears swirling around rising interest rates, a spike in bond yields and elevated oil prices the past few months,” said Thomas Martin, senior portfolio manager at Globalt Investments LLC.

Corporate Highlights:

Applied Materials Inc. tumbled after the chip-equipment maker gave an investor day forecast that was light on specifics. Meta Platforms Inc. analysts remained positive in the wake of the release of the company’s latest AI model. Johnson & Johnson reported another quarter of anemic sales in its medical technology division and said it is leaning toward spinning off, rather than selling, its orthopedics business. Domino’s Pizza Inc.’s sales at existing US locations grew less than analysts expected, with the pizza chain still struggling to attract budget-conscious consumers. Some of the main moves in markets:

Stocks

S&P 500 futures were unchanged as of 8:14 a.m. Tokyo time Hang Seng futures were little changed Australia’s S&P/ASX 200 fell 0.7% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1198 The Japanese yen was little changed at 158.35 per dollar The offshore yuan was little changed at 6.6930 per dollar The Australian dollar was little changed at $0.6982 Cryptocurrencies

Bitcoin fell 0.2% to $83,217.28 Ether fell 0.4% to $2,499.37 Bonds

Australia’s 10-year yield advanced three basis points to 5.32% Commodities

West Texas Intermediate crude rose 0.5% to $94.65 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.

©2026 Bloomberg L.P.