US stock futures rose significantly, absorbing the shock of the Federal Reserve's hawkish signals.
Trading data showed contracts linked to the S&P 500 jumped 0.9% (before settling at 0.8% in Tokyo), while Nasdaq futures rose 1.1%, recouping some of Wednesday's losses by the benchmark index by 1.2% following hints that the Fed might need to raise interest rates to control inflation.
Oil declines, gold soars and currency divergence
Global oil prices fell as supply concerns eased after U.S. President Donald Trump signed a deal to end the war with Iran and reopen the vital Strait of Hormuz.
Trading screens recorded a decline of more than 1.5% to $78 per barrel, while West Texas Intermediate crude fell 1.9% to $75.33 per barrel
On the other hand, the yellow metal took advantage of the greenback's decline, with gold extending gains by 1.5% to reach record highs of $4320.95 per ounce.
Stock indices in other global markets were mixed, with the Asian stock index rising for the fifth day in a row, supported by a jump of about 2% in Japan's Nikkei 225 index and a rise of 1.4% in the Topix index. On the other hand, financial reports monitored a decline in other indices due to interest rate pressures, with Hong Kong's Hang Seng index falling 1.7%, the Shanghai Composite Index down 0.4%, and Australia's S&P/ASX 200 index falling 0.4%, while the Euro STOXX 50 futures fell 0.6%.
The Bloomberg Spot Dollar Index fell 0.2% on Thursday after jumping 0.7% in the previous session, allowing the euro to rise 0.2% to $1.1524, and the Chinese yuan rising 0.2% to $6.7629 in overseas markets.
This coincided with the Japanese yen falling to its weakest levels against the dollar since July 2024 at 160.58 yen, amid investors' concern about the slow pace of monetary tightening by the Bank of Japan despite raising interest rates to the highest level since 1995, according to a Bloomberg poll of economists, which also indicated expectations that the Indonesian and Philippine central banks will raise interest rates by a quarter of a percentage point to counter the energy shock and the depreciation of their currencies.
Bonds and Cryptocurrencies
Government bond yields also saw mixed movements, with the yield on the 10-year US Treasury note falling by 4 basis points to 4.45%, while the yield on the 10-year Japanese bond rose by 2.5 basis points to 2.620%.
The Australian yield increased by one basis point to 4.78%. On the digital asset front, cryptocurrencies fell slightly, with Bitcoin falling 0.4% to trade at $64,142.91 and Ether falling 0.5% to $1,737.21.
On the one hand, markets received a strong dose of optimism represented by an improvement in "risk appetite" after US President Donald Trump's surprise signing of an agreement to end the war with Iran, which in practice means the safe resumption of oil flows through the Strait of Hormuz and ensuring the stability of global supply chains after long periods of blockade and military tension.
On the other hand, this breakthrough is still constrained by economic fears of continued inflation, which the Federal Reserve has confirmed through its strong signals of the possibility of raising interest rates again, which has put central banks in emerging economies (especially in Asia such as Indonesia and the Philippines) under inevitable pressure to protect their currencies from falling against the dollar, and to try to contain successive energy shocks by proceeding with monetary tightening.
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