Stocks In Asia Edge Lower As Fed Anxiety Builds: Markets Wrap

Asian shares were slightly down on Tuesday as traders grew anxious about the pace of easing by the Federal Reserve beyond this week’s near-certain rate cut.

MSCI Inc.’s gauge of regional shares fell 0.2% as benchmarks in Korea, Japan and Australia opened lower. US stock futures bucked the trend, edging higher after the S&P 500 shed 0.3% on Monday and US Treasuries joined a global bond slump. Australian yields rose ahead of a monetary policy decision on Tuesday.

The jitters came ahead of the Fed’s decision on Wednesday, where it is broadly expected to deliver a 25 basis-point rate cut.

Some traders have warned the US central bank may signal a slower pace of easing ahead given that still-high inflation and the lack of fresh data during the shutdown have caused divisions among Fed officials. After this week’s likely cut, money markets are leaning toward two more moves by the end of 2026, down from three signaled barely a week ago.

"The expected Fed rate cut this week is expected to come with a hawkish tone and a potentially extended pause next year," said John Canavan, lead analyst at Oxford Economics. 

Chip stocks in Asia were in focus after Nvidia Corp. was granted permission by President Donald Trump to ship its H200 artificial intelligence chip to China in exchange for a 25% cut of the sales. The firm’s shares climbed in after-hours trading.

Meanwhile, Paramount Skydance Corp. launched a hostile takeover bid for Warner Bros. Discovery Inc. at $30 a share in cash, just days after the company agreed to a deal with Netflix Inc. The offer values Warner Bros. at $108.4 billion, including debt.

Gold, silver, copper and oil were steady after they all fell on Monday. Crude prices tumbled around 2% in Monday’s session, with Russian exports to India in focus.

The yen steadied after falling on Monday after a magnitude-7.6 quake struck off Japan’s northeast coast. Earlier, Japanese bond yields rose across the curve after data showed that the economy shrank in the three months through September, giving some justification for Prime Minister Sanae Takaichi’s stimulus package announced last month. The figures add an element of complexity to the Bank of Japan’s policy decision next week, but likely won’t derail it from its gradual hiking path.

In China, Beijing’s top leaders made strengthening domestic demand their top economic priority for 2026, while hinting at a measured approach to stimulus.

The US 10-year yield hit its highest level since September in Monday’s session, extending bond selling in Europe and Japan and supporting the dollar.

Kevin Hassett, a top candidate to take over the role of Fed chair, said it would be irresponsible for the Fed to lay out a plan for where it aims to take interest rates over the next six months. The White House National Economic Council Director emphasized the importance of following the economic data in a CNBC interview Monday.

A $58 billion sale of three-year notes arrived at a lower-than-forecast yield Monday, a sign of better than anticipated demand. A $39 billion auction of 10-years and $22 billion of 30-years are set for Tuesday and Thursday, respectively.

• Medline Inc. is seeking to raise as much as $5.37 billion in a US initial public offering, setting the stage for what would be among the biggest-ever private equity backed listings.

• PepsiCo Inc. announced a series of operational changes backed by activist investor Elliott Investment Management on Monday, including a review of its supply chain and slashing its overall number of products. The company is also planning layoffs in North America, according to an internal memo.

• Some China Vanke Co. investors voiced concerns about its plan to delay bond payments at a meeting with Shenzhen officials on Sunday, according to people familiar with the matter, adding pressure on the embattled developer just days ahead of a scheduled vote on the proposal.

• Nomura Asset Management Co. plans to relocate dozens of staff from its Tokyo headquarters to offices in cities such as London and New York to develop its homegrown talent for investment and sales operations.

• A joint venture between Blackstone Inc.’s real estate business, MW Group and DivcoWest struck a deal to purchase a Hawaiian commercial property owner Alexander & Baldwin Inc. in a $1.5 billion all-cash deal.

Some of the main moves in markets:

• S&P 500 futures rose 0.2% as of 9:26 a.m. Tokyo time

• Hang Seng futures were little changed

• Japan’s Topix was little changed

• Australia’s S&P/ASX 200 fell 0.4%

• Euro Stoxx 50 futures were little changed

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.1642

• The Japanese yen was little changed at 155.88 per dollar

• The offshore yuan was little changed at 7.0690 per dollar

• The Australian dollar was little changed at $0.6628

• Bitcoin fell 0.7% to $90,719.76

• Ether fell 0.3% to $3,137.82

• The yield on 10-year Treasuries was little changed at 4.17%

• Australia’s 10-year yield advanced two basis points to 4.73%

• West Texas Intermediate crude was little changed

• Spot gold was little changed