Global Market Today: Asian stocks rise on Fed rate signal, oil gains

Asian stocks showed a rebound following two days of declines, driven by hopes that the Federal Reserve may not need to hike interest rates aggressively next year. The MSCI Inc.'s Asia Pacific equities index climbed 0.2%. However, a sell-off in semiconductor stocks pushed the index to its weakest close since August on Tuesday.

Earlier, the S&P 500 managed to close little changed after New York Fed President John Williams reiterated his view that one more rate hike this year was justified, but no further tightening was needed in 2027. This helped ease pressure on tech stocks, with Microsoft Corp. reaching a record high. As traders awaited the release of US consumer price inflation data on Wednesday, US oil prices surged by 0.8% to around $94.80 a barrel.

This followed a Middle East flare-up that heightened uncertainty about a recovery in energy shipments from the Persian Gulf. Brent crude oil increased by 0.7% to $106.40 a barrel.

New York Fed President John Williams' remarks provided some relief before the crucial inflation data, with markets concerned that high oil prices could maintain persistent price pressures. Traders are also keeping an eye on earnings to gauge the direction of the artificial intelligence trade, which has faced doubts over whether billions in spending will yield sufficient returns.

"The prospect of fewer Fed hikes should give Asian stocks some breathing room today," said Josh Gilbert, lead Asia Pacific analyst at eToro. "Williams talking down an extended tightening cycle has taken some heat out of yields, and that's welcome news for tech stocks across Asia."

As the US earnings season began, JPMorgan Chase & Co., Citigroup Inc., and Wells Fargo & Co. all set a new third-quarter record for lending income, with customers continuing to borrow even as interest rates rose. At Goldman Sachs Group Inc., equity traders outperformed estimates, while fixed-income and rates trading fell short.

Meanwhile, Chinese stocks faced a potential slide back into a bear market due to growing doubts about the likelihood of substantial support measures to revive the economy and waning investor confidence. The CSI 300 Index had fallen over 15% from its June peak, trading at its lowest point since August 2025.

Indian stocks also attracted attention after Finance Minister Nirmala Sitharaman expressed openness to discussing a transaction tax on share trading to attract capital inflows. The Nifty 50 extended its gains as she spoke, closing 1.6% higher in its biggest single-day increase in over two months.

In Japan, the yen remained relatively stable in early trading, as Bank of Japan officials were reportedly hesitant about a rare consecutive interest-rate increase this month. However, they kept the door open for another move as early as December.

US stocks managed to stay resilient despite the broader market concerns. The S&P 500 Index had not experienced a 1% decline in 53 trading sessions through Tuesday, marking the longest such period since January 2020, according to Bloomberg data. This remarkable streak of stability is surprising, given the renewed fears over rising interest rates, soaring bond yields, and elevated oil prices in recent months.