Asian stocks rise, treasuries steady before Fed

The chipmaker is planning a total of 100 trillion won ($75 billion) in shareholder returns for 2026. The optimistic tone came as Alphabet Inc. and Microsoft Corp. prepared to report earnings Wednesday, while Amazon.com Inc. is set to announce on Thursday. Elsewhere, global crude oil benchmark Brent pared some of its losses from the previous two sessions as traders assessed efforts to de-escalate tensions in the Persian Gulf.

The commodity rose 0.4% to around $114.35 a barrel. Treasuries were little changed, while the dollar held its gains from the previous two sessions. Optimism around the AI trade rebounded this week after a recent rout in chip stocks, but it faces a key test from megacap tech earnings in the next few days. Investors are also awaiting the Fed’s rate decision for clues on the policy outlook as elevated bond yields and persistent inflation complicate the case for lower borrowing costs.

“A wave of AI news sparked a relief rally after three weeks of pressure on the group,” Michael O’Rourke, chief market strategist at JonesTrading Institutional Services LLC, wrote in a note. That news has “offered solace to investors that the large-scale AI firms can, and are proceeding to spend even if smaller firms are under pressure.” In geopolitical news, Israeli Prime Minister Benjamin Netanyahu and opposition leader Gadi Eisenkot are neck and neck in the first election since the 2023 Hamas attacks, setting up a tense period of negotiations over who will form the next government.

Elsewhere, gold held its gains from the previous session, when bullion jumped 1.1% to about $4,060 an ounce. On Tuesday, a US gauge of chipmakers jumped 3.6%, sending Wall Street benchmarks higher. Meta Platforms Inc.’s $25 billion share sale was five times oversubscribed, while Oracle Corp. expanded its partnership with OpenAI. The main focus on Wednesday will be the Fed decision. The Fed will be followed by rate decisions from the European Central Bank and Bank of Japan this week.

The Fed is expected to keep rates steady, even after inflation data for September came in hotter than expected. If they do stay put, Chairman Kevin Warsh could face pressure to explain policymakers’ rationale for not acting now after they voted unanimously last month to raise rates to address burgeoning inflation. On Tuesday, data showed US consumer confidence unexpectedly rose in October for the first time in four months, buoyed by brighter views on the labor market and business conditions.

The reading topped all forecasts in a Bloomberg survey of economists. The “moderate rebound in US consumer sentiment and decline in oil prices seem to have supported risk sentiment going into a busy week of central bank decisions,” said Dan Pan, an Americas economist at Standard Chartered Bank. “A hawkish hold seems to be the baseline but we would argue that the market might be underestimating the risks for a hike.”