Asian stocks steady as traders await Fed decision
Published Wed, Sep 16, 2026 · 09:19 AM
ASIAN stocks were broadly steady as elevated oil prices and rising bond yields kept investors cautious ahead of the US Federal Reserve’s interest rate decision.
MSCI’s Asian equities index advanced 0.1 per cent. Contracts for Wall Street gauges also nudged up in early trading as OpenAI weighed a new funding round at a US$1.2 trillion valuation. The S&P 500 and Nasdaq 100 slipped Tuesday, while a gauge of chipmakers eked out an increase.
Among the main moves in markets, S&P 500 futures rose 0.1 per cent as at 9.09 am Tokyo time. Hang Seng futures rose 0.3 per cent, Japan’s Topix climbed 0.6 per cent and Australia’s S&P/ASX 200 advanced 0.2 per cent.
Helping sentiment, US crude oil fell 0.6 per cent to US$105.15 a barrel after surging more than 20 per cent this month.
The rally in energy prices and growing bets on a Fed rate hike had fuelled a bond sell-off, pushing the 10-year Treasury yield as high as 5.04 per cent – the highest in almost two decades – before it closed at 5 per cent.
Treasury futures consolidated, while government bonds opened higher in Australia and New Zealand.
Elsewhere, Bitcoin extended its slide to trade around US$75,600 as the US Senate blocked a landmark crypto market structure bill.
The Fed’s decision on Wednesday (Sep 16) is in focus after hotter-than-expected core inflation last week and concerns over government budgets bolstered expectations for the first rate increase in since 2023. Markets are pricing in a more than 90 per cent chance of a hike, raising the prospect of tighter financial conditions as elevated energy and borrowing costs weigh on equities.
“If the Fed follows the futures market and hikes rates, our sense is that stocks are likely to see downward pressure over the near term,” said Chris Senyek at Wolfe Research.
“However, we’ve found that over a longer time horizon – six to 12 months after the first rate hike – stocks typically recover and push into positive territory.”
Three major central banks meet this week, with the Fed followed by policy decisions from the UK and Japan, potentially reshaping the monetary policy outlook for the rest of 2026.
A decision 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 to 3.75 per cent since December as a majority of policymakers argued that progress in lowering inflation was being stalled by temporary factors.
Elsewhere, Brent slipped in early Wednesday trading after settling almost 3 per cent higher on Tuesday as outages at a key Saudi pipeline and Libyan oil fields added to supply risks in a market already hit by disruptions from the Iran war.
Traders were watching for signs of how long Saudi Arabia’s East-West pipeline will remain closed after drone attacks halted operations last week.
Saudi Aramco is delaying oil supplies to some European customers in September, people familiar with the matter said.
“The combination of higher interest rates and elevated oil prices is like asking equities to run a marathon with ankle weights strapped on,” said Darrell Cronk at Wells Fargo Investment Institute.
“Higher rates increase the discount rate investors apply to future earnings, while higher energy costs drain purchasing power from consumers and pressure profit margins.” BLOOMBERG
