Skip to main content

Exclusive news, data and analytics for financial market professionalsLearn more aboutRefinitiv

A man walks past a stock quotation board showing the Nikkei stock prices outside a brokerage in Tokyo

A man walks past a stock quotation board showing the Nikkei stock prices outside a brokerage in Tokyo, Japan, June 16, 2026. REUTERS/Manami Yamada Purchase Licensing Rights, opens new tab

  • Summary

  • Companies

  • Divided Fed stands pat on rates, long-end bonds slump

  • Stocks stumble as worries on AI trade rattle markets

  • Oil near $90/barrel amid Middle East hostilities

SINGAPORE, July 30 (Reuters) - Asian stocks struggled for direction on Thursday, nursing steep losses for the week on mounting investor jitters around the AI trade, while a divided Federal Reserve kept ​interest rates steady, leaving bond markets questioning where rates are headed.

Brent futures slipped below $90 per barrel, after jumping over 7% a ‌day earlier as fighting in the Middle East escalated, although data showed tankers continued to make their way out of the region despite the continued missile and drone strikes.

Sign up here.

The dollar was on the defensive after the U.S. central bank held steady although the split decision left investors confused on whether the Fed will see through rate hikes to combat inflation. Yields on ​longer-dated U.S. Treasuries rose to 19-year highs.

Asian chipmakers have been the centre of attention this week after a deep selloff in South Korean stocks that ​wiped more than $2 trillion from the country's equity market rocked markets and investors freted about the returns from massive AI ⁠spending.

The KOSPI (.KS11), opens new tab rose 4% in choppy trading on Thursday, but is staring at a 12% weekly decline that prompted Finance Minister Koo Yun-cheol to apologise ​for the introduction of single-stock leveraged ETFs.

"Given that the fundamental thesis remains intact, there does appear to be an irrational, panic-like element to the current selling," said ​Gina Kim, portfolio manager for emerging market equities at Nordea Asset Management in Singapore.

"I cannot comment on when the panic will stop as such but some indicators to look out for would be margin balances in both Taiwan and Korea for retail investors. Both are declining but we would ideally need to see some levelling off," said Kim.

Chipmaker Samsung Electronics (005930.KS), opens new tab said ​its operating profit jumped 19-fold to a record in the second quarter, helping lift beaten-down investor sentiment.

MSCI's broadest index of Asia-Pacific shares outside Japan (.MISX00000PUS), opens new tab rose ​over 1% in early trading. Japan's Nikkei (.N225), opens new tab was 2% higher, but set for a 3% drop in the week.

Earnings from U.S. megacaps Meta (META.O), opens new tab and Microsoft (MSFT.O), opens new tab outlined the contrasting fortunes of the companies ‌that are ⁠able to showcase their ability to generate cash even as they spend to build out AI infrastructure.

Microsoft said it expects to keep generating cash through the fiscal year 2027 that just started, lifting its shares, while Meta reported a 91% drop in second-quarter free cash flow, sending its stock down.

Nasdaq futures rose 1.2% in Asian hours while European futures were 0.3% higher.

FED LOOKING TO MARKETS FOR CUES

In a post-meeting media conference, Fed Chair Kevin Warsh vowed to contain inflation but ​declined to offer any guidance on what ​action would be needed by ⁠the central bank.

Warsh noted that bond yields since the Fed's last monetary policy meeting had risen notably — investors have priced in interest rate increases — and he welcomed that move, even while saying it did not mean the central bank needed ​to ratify it with action.

Yields on 30-year U.S. bonds were at 5.2039%, having hit their highest since June 2007 ​at 5.2273% late in ⁠New York trading.

"What we heard was a fairly defiant message about bringing inflation back to target, albeit with very little substance on exactly how that would be achieved," said Chris Weston, head of research at Pepperstone.

Fed funds futures now implied around a 60% chance the Fed would lift rates at its next meeting in September and ⁠had 33 ​basis points of tightening priced in by year-end.

"The Fed is likely to face ongoing questions ​around its credibility," said Kerry Craig, global market strategist at J.P. Morgan Asset Management.

"The gap between the Fed’s rhetoric and its actions may pose a challenge for market pricing. A new chair faces ​a divided committee and a bond market that’s starting to question the central bank’s resolve."

Reporting by Ankur Banerjee and Rae Wee in Singapore; Editing by Christian Schmollinger

Our Standards: The Thomson Reuters Trust Principles., opens new tab

  • X

  • Facebook

  • Linkedin

  • Email

  • Link

Purchase Licensing Rights

Read Next

  • ago

Zhongji InnoLight opens lower in Hong Kong's biggest share sale this year

  • ago

Gold edges higher as markets weigh Warsh's inflation message after Fed decision

  • ago

South Korea to cap investment in single-stock leveraged ETFs, ministry says

India says sustained oil price spike could strain fiscal deficit, current account balances

Top South Korean policy makers apologise for single-stock leveraged ETFs

  • ago

Colgate-Palmolive India's quarterly profit rises on growing demand for oral care

World

Middle Eastcategory · July 30, 2026 · 12:34 AM UTC · ago

The United States is conducting ​air ​strikes in Iran, the ⁠U.S. Central ​Command said ​on Wednesday.

12:23 AM UTC

July 29, 2026

July 29, 2026

July 29, 2026

Read Original at Reuters →