Asian stocks rise, oil jumps on West Asia conflict ahead of Fed decision

Asian stocks rose on Wednesday July 29 after new fighting broke out in West Asia causing crude price to rise, hinting at renewed concerns over global energy supply constraints

South Korean shares climbed about 2%, led by SK Hynix, whose quarterly profit jumped 557%. Kospi was up 0.20% after trading was briefly halted due to the index slumping 10% on Tuesday.

The broader MSCI Asia Pacific Index rose 0.7%, Japan's Topix gained 0.4% and the Nikkei added 0.59%.

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Hang Seng futures rose 0.5% and S&P 500 futures were up 0.4% as of 9.02 am Tokyo time. The yen held steady at 163.86 per dollar, and the offshore yuan stayed near 6.7718 per dollar.

Brent crude jumped 3.4% to above $87 a barrel, breaking a three-day losing streak, after the US military said it had neutralised an "attempted" Iranian attack on troops stationed in the region. It had earlier reported its biggest three day drop since April 2020 due to the temporary halt in strikes.

US crude, West Texas Intermediate, rose 3.4% to $81.97 a barrel.

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Nasdaq 100 futures fell as much as 0.6% right after the attacks before turning positive. The index had already been close to a technical correction following an AI chipmaker selloff, as investors moved money out of big chip stocks and into sectors seen as more linked to the wider economy.

The fresh fighting has put investor focus back on the Strait of Hormuz, with fears that disrupted oil flows could stimulate inflation just before the Federal Reserve's rate decision on Wednesday. That adds more uncertainty for investors who were already stepping back from tech stocks over doubts about whether massive AI spending will pay off.

Also Read: Crude jumps amid renewed hostilities in West Asia; Brent above $87

Chipmaker stocks stayed under pressure. Micron Technology and Sandisk were among the biggest laggard on the S&P 500 on Tuesday, and the Philadelphia Semiconductor Index fell 4.5%, putting it on track for its worst month since 2002, just after its best quarter on record.

Microsoft and Meta Platforms will report their earnings on Wednesday, followed by Apple and Amazon a day later. The Fed's decision also lands Wednesday.