Asian markets make nervous start ahead of Fed decision

Asian markets opened cautiously on Wednesday, awaiting the Federal Reserve's policy decision due later in the day. MSCI's comprehensive index of Asia-Pacific shares, excluding Japan, saw fluctuations, ending the session up 0.2%, primarily driven by a 0.8% growth in Korean stocks. S&P 500 e-mini futures experienced a slight uptick of 0.1%.

On Wall Street, the S&P 500 fell by 0.5% for the second consecutive day, with the 10-year Treasury bond yield hitting its highest level since 2007, following a jump in crude prices and a contentious debate surrounding artificial intelligence development. Tony Sycamore, a market analyst at IG in Sydney, commented, "US equity markets closed lower overnight as rising Treasury yields, another jump in crude, and the polarized debate around AI pacing left the market in a cautious mood."

The yield on the US 10-year Treasury bond decreased by 0.8 basis points to 4.9875% in Asian trade, after breaking the 5% mark for the first time in three years, ahead of the Federal Reserve's decision and a media conference by Fed Chair Kevin Warsh. Traders anticipate a Federal Reserve rate hike, with a 92.4% probability of a 25-basis-point increase during the policy announcement, compared to a 59.4% chance a week prior.

The U.S. dollar index, which gauges the greenback's strength against six currencies, hovered close to a two-week high at 99.656. Oil prices declined as trading resumed in Asia, with Brent crude futures slipping by 0.6% to $108.08 a barrel, despite an earlier 2.9% rise on Tuesday due to shipping industry reports indicating the suspension of crude loadings at Saudi Arabia's Red Sea export hub of Yanbu and Riyadh canceling some cargo deliveries to European customers.

Digital assets continued to decline after the U.S. Senate voted against advancing comprehensive cryptocurrency legislation backed by President Donald Trump. Bitcoin fell by 0.1% to $75,816.24, while ether decreased by 0.2% to $2,403.27.