Asian stock markets are expected to open lower, mirroring a downturn on Wall Street, following the Federal Reserve's decision to raise interest rates for the first time since 2023. The Fed's move also signaled further tightening of monetary policy to combat inflation, leading to a significant strengthening of the U.S. dollar, which saw its largest gain since June. Futures for equity indexes in Australia, Hong Kong, and South Korea all indicated a negative start to trading, while Japanese futures showed a modest gain. U.S. stock contracts, on the other hand, remained largely unchanged.
The S&P 500 Index dropped to its lowest level since July, reflecting investor concerns over the rate hike's impact on economic growth. The Nasdaq 100 Index, however, ended the trading session relatively flat, bolstered by a strong performance from semiconductor stocks, which collectively advanced.
This market reaction comes after a period of volatility, with global stocks falling on Wednesday, reversing earlier gains. The benchmark 10-year U.S. Treasury bond yield surged, temporarily hitting 5%, though it later settled around 4.95%. Oil prices also experienced a decline, falling below $100 per barrel, while gold prices fell and the dollar gained strength against other major currencies.
