Asian Markets Mixed as Fed Decision, Iran Tensions, and Inflation Data Weigh on Sentiment

Asian stock markets showed mixed performance on Wednesday as investors remained cautious ahead of the U.S. Federal Reserve’s policy decision and ongoing geopolitical tensions between the United States and Iran. Market sentiment was further influenced by strong inflation data from Australia and lingering concerns over global technology sector growth.

Investor confidence stayed fragile after Wall Street ended lower overnight. A report from the Wall Street Journal indicating that OpenAI missed internal targets for both user growth and revenue raised fresh doubts about the sustainability of aggressive artificial intelligence investments. Despite this, U.S. stock index futures moved slightly higher during Asian trading hours as traders looked ahead to earnings results from the so-called “Magnificent 7” tech giants.

Attention is now firmly on the Federal Reserve, with expectations that interest rates will remain unchanged. However, markets are closely watching for signals on when potential rate cuts could begin, especially as inflation risks persist due to elevated energy prices. Oil markets remain under pressure amid rising geopolitical tensions, particularly following reports that former U.S. President Donald Trump has instructed aides to prepare for a prolonged blockade of Iran, raising concerns about disruptions in the Strait of Hormuz.

Regional markets reflected this uncertainty. South Korea’s KOSPI edged up slightly after reaching record highs, while Singapore’s Straits Times Index declined. Japan’s markets were closed for a public holiday, and India’s Nifty 50 futures traded flat.

In China and Hong Kong, market movements were mixed. Shares of Hua Hong Semiconductor dropped sharply after reports suggested potential new U.S. restrictions on chipmaking equipment exports. However, broader tech stocks remained supported by optimism surrounding cost-efficient AI developments from DeepSeek. The Shanghai Composite and CSI 300 indices posted gains, while Hong Kong’s Hang Seng and its tech sub-index also moved higher.

Australia’s S&P/ASX 200 declined after data showed a sharp rise in first-quarter inflation. Consumer prices surged, driven largely by higher fuel and transport costs, increasing expectations that the Reserve Bank of Australia may continue tightening monetary policy.