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Asian shares gained and US stock futures climbed as oil prices extended their decline after US President Donald Trump signed an interim deal to end the Iran war and reopen the Strait of Hormuz.
Asian stocks rose 0.5% while contracts on the S&P 500 were up 0.8% and Nasdaq futures increased over 1%. South Korea's Kospi index was up 1%, while Japan's Nikkei 225 was up nearly 2%.
The moves followed a 1.2% drop in the US benchmark on Wednesday after the Federal Reserve signaled rates may need to rise further to contain inflation. Brent crude fell more than 1% early in Asia, dropping below $79 a barrel.
Trump told reporters he signed the document at the palace of Versailles near Paris, where he had dinner with French President Emmanuel Macron. The so-called memorandum of understanding is now in effect, a US official said. However, it was unclear if Iran had immediately begun taking steps to fully reopen the Strait of Hormuz.
Meanwhile, yields on Australian and Japanese bonds climbed, tracking a selloff in US Treasuries following the Fed decision. Two-year Treasury yields, which are highly sensitive to Fed policy expectations, jumped 13 basis points to 4.18%. Roughly half of Fed policymakers projected rate hikes this year, prompting traders to fully price in an increase by October and see a strong chance of a move as soon as September.
Fed Chair Kevin Warsh, in his first press conference as head of the central bank, declined to offer guidance on the next policy move. He emphasized that inflation has remained above the Fed’s 2% target for several years and reiterated the central bank’s commitment to restoring price stability.
Central banks in Indonesia and the Philippines — two economies hit hard by the steep increase in global oil prices following the Iran war — are both expected to raise their policy rates by a quarter-point each on Thursday, according to the majority of economists surveyed by Bloomberg.
The Fed decision marked the fourth consecutive meeting in which policymakers left rates unchanged. Officials described economic growth as “solid” and highlighted strong productivity gains and capital investment, while making clear that inflation has become a greater concern than labor-market weakness.
Warsh also announced the creation of a task force to review the Fed’s $6.7 trillion balance sheet, an issue he has long criticized. The group would examine whether “monetary policy is coming from our interest rate tool or our balance sheet tool,” he said.
Elsewhere in markets, the yen fell to its weakest level against the US dollar since July 2024, raising the risk of official intervention.
Investors remained concerned the central bank was not tightening policy quickly enough to contain inflation and stabilize the yen, even after it raised its benchmark rate to the highest level since 1995 earlier this week. Deputy Governor Shinichi Uchida said the exchange rate is important to the economic outlook but is not a direct policy target.
With inputs from Bloomberg
Asian stocks rose 0.5% while contracts on the S&P 500 were up 0.8% and Nasdaq futures increased over 1%. South Korea's Kospi index was up 1%, while Japan's Nikkei 225 was up nearly 2%.
The moves followed a 1.2% drop in the US benchmark on Wednesday after the Federal Reserve signaled rates may need to rise further to contain inflation. Brent crude fell more than 1% early in Asia, dropping below $79 a barrel.
Trump told reporters he signed the document at the palace of Versailles near Paris, where he had dinner with French President Emmanuel Macron. The so-called memorandum of understanding is now in effect, a US official said. However, it was unclear if Iran had immediately begun taking steps to fully reopen the Strait of Hormuz.
Meanwhile, yields on Australian and Japanese bonds climbed, tracking a selloff in US Treasuries following the Fed decision. Two-year Treasury yields, which are highly sensitive to Fed policy expectations, jumped 13 basis points to 4.18%. Roughly half of Fed policymakers projected rate hikes this year, prompting traders to fully price in an increase by October and see a strong chance of a move as soon as September.
Fed Chair Kevin Warsh, in his first press conference as head of the central bank, declined to offer guidance on the next policy move. He emphasized that inflation has remained above the Fed’s 2% target for several years and reiterated the central bank’s commitment to restoring price stability.
Central banks in Indonesia and the Philippines — two economies hit hard by the steep increase in global oil prices following the Iran war — are both expected to raise their policy rates by a quarter-point each on Thursday, according to the majority of economists surveyed by Bloomberg.
The Fed decision marked the fourth consecutive meeting in which policymakers left rates unchanged. Officials described economic growth as “solid” and highlighted strong productivity gains and capital investment, while making clear that inflation has become a greater concern than labor-market weakness.
Warsh also announced the creation of a task force to review the Fed’s $6.7 trillion balance sheet, an issue he has long criticized. The group would examine whether “monetary policy is coming from our interest rate tool or our balance sheet tool,” he said.
Elsewhere in markets, the yen fell to its weakest level against the US dollar since July 2024, raising the risk of official intervention.
Investors remained concerned the central bank was not tightening policy quickly enough to contain inflation and stabilize the yen, even after it raised its benchmark rate to the highest level since 1995 earlier this week. Deputy Governor Shinichi Uchida said the exchange rate is important to the economic outlook but is not a direct policy target.
With inputs from Bloomberg
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