Asian Stocks Fall as Fed Holds Rates, Mideast Tensions Rise

Asian stocks fall as Fed holds rates steady and Mideast tensions rise; Hang Seng leads losses, oil and gold remain volatile.

Asian markets closed mostly lower on Thursday as investors reacted to the U.S. Federal Reserve’s decision to keep interest rates unchanged and rising geopolitical tensions in the Middle East, which continue to cast a shadow over global sentiment.

The Hang Seng Index in Hong Kong led regional losses, falling sharply by 1.97%, amid heavy sell-offs in tech and real estate sectors. China’s Shanghai Composite also slid 0.98%, while the CSI 300 index, which tracks large-cap stocks on the mainland, declined 0.78%.

Japan’s Nikkei 225 edged up 0.76%, reversing earlier losses thanks to gains in exporters benefiting from a weaker yen, while the broader Topix fell 0.52%. South Korea’s Kospi slipped 0.15%, and Australia’s S&P/ASX 200 was virtually unchanged, inching up 0.03%.

The downturn follows the Federal Reserve’s decision to maintain its benchmark interest rate at a range of 4.25% to 4.5%, a move widely anticipated by markets. Fed Chair Jerome Powell said the central bank will remain patient, noting uncertainty surrounding inflationary impacts from ongoing U.S. trade tariffs.

Asian Stocks Fall as Fed Holds Rates, Mideast Tensions Rise

Despite standing pat for now, the Fed hinted at potential rate cuts later in the year—two in total—should economic data continue to soften.

Adding to investor unease, rising tensions in the Middle East have put geopolitical risk back on the radar. U.S. President Donald Trump convened his national security team for the second day in a row as the White House weighs a possible military response against Iran following heightened conflict with Israel. Reports from NBC News suggest a strike is under active consideration.

Commodities reflected the jittery mood. Gold fell 0.19% to $3,391.35 per ounce, while silver dropped 0.49% to $36.80. Oil prices remained steady but elevated: Brent crude edged up 0.09% to $76.38 per barrel, and WTI crude rose 0.03% to $73.48.

Bond markets showed modest movement. The U.S. 10-year Treasury yield was at 4.396%, while yields in the UK and Germany stood at 4.502% and 2.4985%, respectively.

Economic data out of the U.S. showed initial jobless claims rising slightly to 246,000, just above expectations of 245,000—indicating some cooling in the labor market.

On Wall Street, major indexes ended mixed. The Dow Jones Industrial Average slipped 44.14 points, or 0.10%, to 42,171.66. The S&P 500 dipped 0.03% to close at 5,980.87, while the Nasdaq Composite managed a modest gain of 0.13%, ending at 19,546.27.

Looking ahead, investors are awaiting the U.S. Official Bank Rate announcement at 11:00 AM GMT for further clues on global monetary policy direction.

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