This content was published on
June 17, 2026 - 01:19
6 minutes
(Bloomberg) — Stocks in Asia looked set to snap a three-day winning run, tracking declines on Wall Street as investors rotated out of technology shares and positioned for the first Federal Reserve policy decision under Chairman Kevin Warsh.Equity-index futures for Japan, South Korea and Australia pointed to losses at the open, while contracts for Hong Kong edged higher. A pullback in chipmakers after a sharp rally weighed on US equities, dragging the S&P 500 0.6% lower and sending the Nasdaq 100 down almost 2%. Meanwhile, SpaceX extended its post-IPO surge to nearly 50%, overtaking Amazon.com Inc. to become the world’s fifth-largest company by market value.West Texas Intermediate crude edged higher early Wednesday after sliding almost 6% in the previous session to around $76 a barrel. Global benchmark Brent ended below $79. Recent declines in oil prices have helped ease concerns that energy costs may reignite inflation, shifting investors’ focus back to the path of interest rates.“For markets, a ‘higher-for-longer’ rate backdrop, rather than a renewed tightening cycle, can remain supportive of valuations, in our view, particularly if it reflects resilient economic growth alongside gradually moderating inflation pressures,” said Mona Mahajan at Edward Jones.With a well-flagged hike from the Bank of Japan seen as an exception, most developed-world central banks including the Fed are expected to make no changes this week. The bigger focus for investors is what the policy outlook looks like under Warsh. Bloomberg Economics sees a shift in how the Fed communicates with markets as Warsh is unlikely to submit his own “dot” to the closely scrutinized dot plot, breaking with precedent under Jerome Powell, Janet Yellen and Ben Bernanke.“In a matter of months, the narrative has shifted from ‘how many rate cuts this year?’ to ‘how many rate hikes are on the table?’” said Bret Kenwell of eToro. “That’s a big swing, and it puts Warsh in a difficult spot: He can acknowledge the recent pullback in oil prices and sound patient, but he can’t afford to look complacent if broader inflation pressures are moving the wrong way.”Options traders are increasingly divided over the Fed’s near-term rate path, with conflicting bets that span from cuts to various degrees of hikes over the coming months.Policy forecasts from Wall Street strategists also run the gamut. US asset manager PGIM this week said the Fed will raise rates three times this year, while Citigroup Inc.’s Andrew Hollenhorst has said the central bank will cut rates this year. BNP’s recent call is for three rate hikes starting in December.While benchmark oil prices reached their lowest levels since early March, Treasury yields remained above Monday’s lows, even after a 20-year bond auction. On the day, they were down by two to five basis points across maturities, with those on 30-year bonds leading the declines.“In the short run, oil prices are down a lot, but the market is trying to decide what’s more important — the short term or the unclear impact on inflation in the long run,” said David Robin, an interest-rate strategist at TJM Institutional Services LLC. “The absence of an answer is limiting the impact of oil prices on the rates market.”Meanwhile, the US and Iran are preparing to formally sign an interim peace deal that’s left both sides claiming victory, with details of the accord still emerging and leaving many European governments, energy investors and shipping companies with reservations about how fast the Strait of Hormuz can return to pre-war conditions.“We still expect the recovery in shipping and Gulf production to take time and, as temporary buffers fade, current price optimism to unwind, leading to higher prices and more volatility ahead,” Sian Fenner, head of business and industry economics at Westpac Banking Corp., wrote in a note.Corporate Highlights:SpaceX formally agreed to take over Cursor in a deal that values the artificial intelligence coding startup at $60 billion, cementing a key part of Elon Musk’s efforts to catch up with rivals on coding tools. US Commerce Secretary Howard Lutnick warned Anthropic PBC in a letter last week that it would need government permission to grant foreign nationals access to its most advanced AI models and threatened criminal and civil penalties if the firm failed to comply, according to a copy obtained by Bloomberg News. Yum! Brands Inc. is selling its struggling Pizza Hut division for $2.7 billion, allowing the restaurant operator to focus on its better-performing KFC and Taco Bell chains. Robinhood Markets Inc. said it’s cutting 10% of its workforce, a reduction of around 300 positions, to “remain lean and disciplined” as it develops new products. Some of the main moves in markets:StocksS&P 500 futures were little changed as of 8:16 a.m. Tokyo time Hang Seng futures rose 0.1% S&P/ASX 200 futures fell 0.3% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1614 The Japanese yen was little changed at 160.40 per dollar The offshore yuan was little changed at 6.7569 per dollar The Australian dollar was little changed at $0.7070 CryptocurrenciesBitcoin fell 0.1% to $65,688.85 Ether fell 0.1% to $1,793.86 BondsAustralia’s 10-year yield declined three basis points to 4.79% CommoditiesWest Texas Intermediate crude rose 0.9% to $76.72 a barrel Spot gold rose 0.1% to $4,336.60 an ounce This story was produced with the assistance of Bloomberg Automation.©2026 Bloomberg L.P.
