Asian stock markets traded higher on Wednesday as investors balanced gains in regional equities against renewed tensions in the Middle East, while keeping a close watch on the U.S. Federal Reserve's interest rate decision later in the day.
South Korea's Kospi climbed 2.11%, Australia's ASX 200 advanced 1.07% and Japan's Nikkei 225 gained 1.08%.
Investor attention returned to geopolitical developments after U.S. Central Command said American forces had intercepted an attempted missile attack launched by Iran. In a statement posted on social media, CENTCOM said the Islamic Revolutionary Guard Corps fired multiple ballistic missiles at U.S. forces stationed in the Middle East, adding that all of the missiles were successfully intercepted.
The renewed tensions pushed oil prices higher after three straight sessions of declines. Brent crude rose 3.4% to around $87 a barrel as traders reassessed the risk of supply disruptions following the latest military developments.
Markets, however, remained focused on the Federal Reserve's policy announcement. Investors are looking for fresh signals on the outlook for interest rates after recent swings in oil prices and geopolitical uncertainty complicated the inflation picture.
Wall Street delivered a mixed performance overnight. The Dow Jones Industrial Average jumped more than 500 points, extending its winning streak to a third session as lower oil prices earlier in the week supported sentiment. In contrast, the Nasdaq Composite ended lower for a fifth consecutive day, with continued weakness in semiconductor shares weighing on the technology-heavy index.
U.S. equity futures were little changed in early trading. S&P 500 futures edged slightly higher, Nasdaq-100 futures traded near the flatline and Dow Jones Industrial Average futures slipped 38 points, or about 0.1%.
Investors are expected to remain cautious ahead of the Fed's policy decision, while monitoring developments in the Middle East for any signs that geopolitical tensions could further influence oil prices and global financial markets.
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