Asian stocks advanced on Tuesday while the U.S. dollar slipped, as investors anticipated the Federal Reserve would restart its rate-cutting cycle this week. Markets are fully pricing in a 25-basis-point cut at Wednesday’s meeting, with traders also awaiting the Fed’s updated “dot plot” and comments from Chair Jerome Powell for clues on the pace of future easing.
MSCI’s Asia-Pacific index outside Japan climbed to its highest level in more than four years, up 0.3%. Japan’s Nikkei and Topix also hit fresh records. Optimism about rate cuts has buoyed risk sentiment, though analysts warn that with 127 basis points of cuts already priced in through mid-2026, any hint of a hawkish stance could unsettle markets.
In the U.S., Senate confirmation of Stephen Miran to the Fed board and a court ruling protecting Governor Lisa Cook’s position had little market impact. Meanwhile, futures showed muted moves: Eurostoxx 50 slipped 0.09%, FTSE rose 0.08%, and U.S. indexes hovered near record highs after overnight gains.
Tech stocks were in focus as Nvidia shares eased following China’s accusation of anti-monopoly violations, escalating trade tensions. However, Washington and Beijing reported progress on a framework for shifting TikTok to U.S.-controlled ownership, with confirmation expected in an upcoming Trump-Xi call.
Currency markets reflected dollar weakness, with sterling steady at $1.3599 and the euro at $1.1758, close to recent highs. The Australian dollar jumped to a 10-month peak at $0.6677, supported by Fed cut bets and easing trade concerns.
In commodities, Brent crude rose 0.25% to $67.59, while U.S. crude gained 0.22% to $63.44 amid concerns over Ukrainian drone strikes on Russian refineries. Spot gold reached a record $3,689.27 an ounce, fueled by dollar softness and Fed expectations.


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