Asian equities advance as Fed calms tariff nerves

Asian stocks rose following a rally on Wall Street after the Federal Reserve signalled it still sees room to cut interest rates later this year to support growth because any increase in inflation due to tariffs will be brief.Australian and South Korean shares gained with US futures after the S&P 500 climbed 1.1% and the Nasdaq 100 rose 1.3%. Hong Kong contracts were little changed following a drop in US-listed Chinese stocks in a sign China’s outperformance against US equities this year may be faltering. Japanese markets are shut for a holiday, meaning there’s no trading of cash Treasuries in Asia.

The Fed kept interest rates on hold Wednesday, as economists expected, and Chair Jerome Powell was measured in his assessment of how the President Donald Trump’s actions might shape the economy. Powell cited the potential for the impact of tariffs on inflation to be “transitory.” The jump in stocks, the biggest for any Fed day since July, followed a bruising four-week stretch in which the S&P 500 slid into a correction.

Treasuries saw an abrupt reversal on Wednesday, with two-year yields sinking below 4% and the benchmark 10-year yield dropping four basis points to 4.24%. An index of the dollar climbed.In Asia, data set for release includes one-year and five-year loan prime rates in China, unemployment in Australia, inflation in Hong Kong and a rate decision in Taiwan. Later Thursday, the Bank of England is forecast to leave interest rates unchanged while the Swiss National Bank is tipped to cut rates by 25 basis points, according to consensus forecasts.

Elsewhere, Tencent Holdings Ltd. outlined plans to boost spending on AI infrastructure after posting its fastest pace of revenue growth since 2023. In South Korea, Samsung Electronics Co. pledged to strengthen its position in the high-bandwidth memory chip market in response to shareholder criticism.

Oil prices rose Wednesday after a US government report allayed concerns about near-term demand destruction. Gold touched a new high as the Fed projected slower growth and higher inflation.