Asian Stocks Mixed After Fed Rate Cut as Markets Await US-China Trade Talks

Asian shares fluctuated on Thursday after the U.S. Federal Reserve cut interest rates by 25 basis points, while investors awaited the outcome of a crucial meeting between U.S. President Donald Trump and Chinese President Xi Jinping. MSCI’s broadest index of Asia-Pacific shares outside Japan was flat, while S&P 500 e-mini futures rose 0.1% following a modest Wall Street pullback that ended a four-day winning streak.

Global markets remain cautious amid a wave of central bank decisions that will determine the future path of interest rates, as the Trump administration maintains tariffs on foreign imports. The Nikkei 225 slipped 0.1% ahead of the Bank of Japan’s policy decision, where rates are expected to stay unchanged.

The U.S. dollar held steady at 152.70 yen after Treasury Secretary Scott Bessent urged faster rate hikes to prevent currency weakness. Analysts suggested his comments could influence BOJ’s communication on future policy. Meanwhile, the dollar index climbed to a two-week high of 99.131, while the euro was unchanged at $1.16035 before the European Central Bank’s meeting.

The Fed’s cautious tone reflected uncertainty from the ongoing U.S. government shutdown, which has limited access to key economic data. Market expectations for another rate cut have dropped sharply, with futures now pricing in a 67.8% chance that rates will remain steady at the next meeting, compared to 9.1% a day earlier.

The yield on the 10-year U.S. Treasury rose to 4.0757%, a three-week high, while gold gained 0.4% to $3,944.25 per ounce. Brent crude remained stable at $64.92 a barrel.

In corporate news, tech stocks faced pressure as AI-related costs weighed on investor sentiment. Meta forecast higher expenses, and Microsoft reported record AI infrastructure spending of $35 billion. However, Alphabet shares rose after exceeding revenue expectations.