Long Bonds Drop on Fed Pause, Nasdaq Futures Gain: Markets Wrap

(Bloomberg) — Longer-maturity Treasuries extended declines and Asian bonds followed as uncertainty over the Federal Reserve’s policy outlook pushed US 30-year yields to their highest levels in almost two decades.

Thirty-year government bonds in Australia, New Zealand and Japan came under pressure after similar-dated US yields jumped following the Fed’s decision to leave interest rates unchanged for a seventh month. The Treasury 30-year climbed three basis points on Thursday to 5.23%, the highest since 2007, extending an 11-basis-point jump following the Fed decision.

Asian stocks fluctuated in a volatile session that saw South Korea’s Kospi Index swing between gains of as much as 5.5% and a loss of as much as 2.1%.

Futures for the Nasdaq 100 Index climbed 0.6% after the underlying gauge entered a technical correction on Wednesday. Lifting sentiment, Microsoft Corp. gained almost 9% in extended trading after reporting its fastest cloud-computing growth in four years. Meta Platforms Inc. fell 7.5% in post market trading following a disappointing revenue forecast for the current year. European shares were set for a tepid start, with traders awaiting the Bank of England’s policy announcement.

Investors have been whipsawed this week by three themes: a global selloff in semiconductor stocks amid concerns about returns on billions of dollars of AI spending, renewed fighting in the Middle East and uncertainty over the Fed’s inflation fight. The lack of updated policy guidance by the US central bank, coupled with a divided committee, left markets with little clarity on the path for rates.

“There’s very little to hang your head on in the markets,” Torsten Slok, chief economist at Apollo Global Management, said on Bloomberg Television. “It was also a little bit complicated to figure out what was the basis of the decision,” he said, adding that the Fed’s abandonment of providing guidance is fueling historic bond market volatility.

Attention now turns to the BOE on Thursday, followed by the Bank of Japan the following day. UK 10-year bond futures declined for a second day, falling 41 ticks to 86.37, indicating losses in the cash market. Japan’s 30-year bond yields climbed 4.5 basis points to 3.975%.

The moves in longer-maturity bonds revealed investors are growing increasingly concerned that the Fed will fail to rein in inflation that has run above the central bank’s target for five straight years.

Fed Chair Kevin Warsh said the decision to leave rates unchanged wasn’t a sign of inertia at the central bank and that markets would be free to chart their own course based on economic signals. Three of the Fed’s 12 voting officials dissented in favor of a rate increase, highlighting persistent concerns about inflation.

“Despite three committee dissents in favor of a July hike, Chair Warsh stopped short of flagging an imminent hike, echoing June’s tone,” said Fabien Yip, a market analyst at IG International in Sydney. “That is starting to unsettle investors. A Fed unwilling to commit to further tightening raises the question of whether it can keep long-term inflation expectations anchored.”

Meanwhile, West Texas Intermediate crude fell 1% to trade around $83.60 a barrel on Thursday even as the US launched a new wave of strikes against Iran.

MSCI’s Asia Pacific stocks benchmark fell 0.2% as investors rotated out of technology and into real estate and energy shares. Following Microsoft’s earnings, traders now await results from Apple Inc. and Amazon.com Inc. after US markets close on Thursday.

“Microsoft’s solid earnings have provided a dose of relief and given the market fresh hope that the tech trade still has legs,” said Tim Waterer, chief market analyst at KCM Trade. “Sentiment appears to be stabilizing for now, though traders will be watching the rest of the mega-cap reports closely to see whether this rebound can gather real momentum.”

Corporate Highlights:

Qualcomm Inc., the largest maker of smartphone processors, gave a weak profit forecast for the current quarter, signaling that component shortages and rising costs are taking a toll on its main market. Arm Holdings Plc delivered a sales forecast that failed to impress investors, who have grown increasingly wary about chip-industry prospects in recent days. Starbucks Corp. raised its annual outlook after quarterly results surpassed market estimates, a sign that efforts to attract diners with speedier service and new products are paying off. Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.3% as of 1:45 p.m. Tokyo time Nikkei 225 futures (OSE) fell 0.9% Japan’s Topix fell 0.5% Australia’s S&P/ASX 200 fell 0.8% Hong Kong’s Hang Seng was little changed The Shanghai Composite fell 1.1% Euro Stoxx 50 futures were little changed Currencies

The Bloomberg Dollar Spot Index was little changed The euro fell 0.1% to $1.1453 The Japanese yen was little changed at 163.49 per dollar The offshore yuan was little changed at 6.7611 per dollar Cryptocurrencies

Bitcoin rose 0.9% to $64,033.54 Ether rose 1.1% to $1,903.6 Bonds

The yield on 10-year Treasuries advanced three basis points to 4.71% Japan’s 10-year yield advanced 5.5 basis points to 2.800% Australia’s 10-year yield advanced seven basis points to 4.99% Commodities

West Texas Intermediate crude fell 0.8% to $83.79 a barrel Spot gold fell 0.4% to $4,049.81 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Winnie Hsu, Alice French, Carmeli Argana, Elaine Lai and Masaki Kondo.

©2026 Bloomberg L.P.