Asian stocks struggled for direction in choppy trading on Thursday after a week of market turbulence sparked by AI jitters, as a divided Federal Reserve stood pat on rates and left bond markets uncertain about the next move.Brent futures slipped below US$90 per barrel, after jumping over 7 percent a day earlier as fighting in the Middle East escalated, although data showed tankers continued to make their way out of the region despite the continued strikes.
The dollar was on the defensive after the US central bank held rates steady although the split decision left investors confused on whether the Fed will see through rate hikes to combat inflation. Yields on longer-dated US Treasuries rose to 19-year highs.
Asian chipmakers have been at the center of attention this week after a bruising selloff in South Korean equities wiped more than $2 trillion off market value and heightened investor anxiety over the payoff from huge AI investments.
"Uncertainty about US monetary policy, the sharp steepening of the Treasury yield curve, growing tensions in the Middle East and continued worries about the semiconductor industry and AI sector mean that markets are likely to stay volatile in the near term," said Vasu Menon, managing director of investment strategy at OCBC.
