Markets Steady as Powell Speech Looms, Rate-Cut Bets Trimmed – Asia Market Wrap

Caution lingered across markets ahead of Federal Reserve Chairman Jerome Powell’s speech with traders paring wagers on an imminent interest-rate cut.

A gauge of the dollar held its gains from the prior session, spurred by upbeat US manufacturing data and hawkish comments from the Fed officials. Asian shares fluctuated between small gains and losses while futures for European and US stocks were little changed. Chinese shares stood out with a 1.2% jump, with technology among the best performers. Gold fell 0.3%.

Nvidia’s shares slid about 1.9% on alternative trading system Blue Ocean after a report said the company instructed component suppliers to stop production related to the H20 AI chip. That helped lift chip stocks in China and Hong Kong.

The S&P 500 fell for a fifth straight day as stronger US economic data and a more hawkish tone from Fed officials pushed money markets to price a 70% chance of a September rate cut, down from 90% a week ago. Focus now shifts to the Fed’s annual Jackson Hole symposium, where Powell speaks Friday at 10 a.m. New York time for clues on the policy outlook.

Bond investors are heading into the speech largely expecting the Fed will indicate policymakers will start cutting interest rates next month. In recent years, Powell has used the occasion to make market-moving policy news, with investors zeroing in on whether the Fed chair pushes back – or not – on the current pricing for rate cuts.

The central bank has held interest rates steady this year, citing elevated uncertainty over the impact of tariffs on the economy. President Donald Trump, a frequent critic of the Fed, has demanded that Powell and his colleagues lower rates significantly, with some in the administration calling for an outsize half percentage point cut next month.

Fed Bank of Cleveland chief Hammack said she wouldn’t support easing if officials had to decide tomorrow. Other Fed officials speaking Wednesday and Thursday struck a similarly hawkish tone as Cleveland’s Hammack. Atlanta Fed President Raphael Bostic said he still sees just one rate cut this year as appropriate. Jeffrey Schmid, president of die Kansas City Fed, said inflation risk still outweighs risks to the labor market. Fed Chicago President Austan Goolsbee said while some recent indation readings have come in better than expected, he hopes one “dangerous” data point is just a blip.