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September 17, 2025 – 04:57

(Bloomberg) — A nine-day rally that lifted Asian stocks to a record paused Wednesday as investors held back ahead of the Federal Reserve’s interest-rate decision.

The MSCI Asia Pacific Index edged 0.1% lower, while Chinese technology stocks listed in Hong Kong jumped to their highest level in four years as optimism over artificial intelligence fueled demand. Baidu Inc. surged as much as 13% after a stock upgrade.

Gold held recent gains that saw it rise above the $3,700-an-ounce level for the first time, buoyed by a weaker dollar. A gauge of the currency hovered around levels last seen in March 2022. Attention in Asia will also be on a 20-year government bond auction in Japan as political uncertainty and lingering fiscal risks keep longer-dated debt under pressure.

A solid reading on US retail sales Tuesday did little to sway markets, with attention firmly on the Fed meeting. Investors are looking for clues on the path of interest rates that will shape the outlook in the months ahead, with some bond traders stepping up options wagers that the central bank will deliver at least one half-point cut.

“Markets remain in somewhat of a holding pattern ahead of the Federal Reserve’s decision tonight,” wrote Josh Gilbert, a market analyst at eToro in Sydney. “The biggest risk is that the Fed sounds less dovish than markets are hoping for.”

In Asia, Baidu rose after Arete Research upgraded the stock to buy from sell saying the search engine operator’s new in-house chip venture has the potential to more than offset the struggling online advertising business.

Alibaba shares advanced as much as 4% after Goldman Sachs Inc. raised the company’s price target for the Chinese technology firm and lifted its estimated value of the company’s cloud business, citing the latest AI models.

In other corners of the market, Treasuries held their gains with the yield on two-year notes holding at 3.51%. Oil steadied after a three-day gain as traders assessed the fallout from Ukrainian attacks on Russian crude infrastructure.

Meanwhile, money markets are fully pricing in a quarter-point Fed reduction, and a series of interest-rate cuts over the next year. An outlook echoing that view would be an encouraging sign for stock bulls, who have largely banked on a gradual easing path that keeps the economy from sliding into a recession.

Investors will look for changes in the latest quarterly rates projections, known as the dot plot, and pore over Chair Jerome Powell’s remarks later. The “real interest” will lie in how many members join Stephen Miran in dissenting in favor of a 50-basis-point cut, wrote Tony Sycamore, a market strategist at IG Australia Pte.

“We anticipate that Chair Powell will sound dovish, highlighting the increased downside risks to labor markets and expressing a willingness to continue cutting rates further if these risks persist,” he wrote. “In light of that, we believe any ‘buy-the-rumor, sell-the-fact’ reaction will be short-lived, given the possibility of follow-up 25bp rate cuts in October and December.”

Corporate Highlights:

Tencent Holdings Ltd. raised 9 billion yuan ($1.27 billion) on Tuesday from its first bond sale in four years. Chery Automobile Co. is seeking to raise as much as HK$9.1 billion ($1.2 billion) in a Hong Kong initial public offering, kicking off what’s shaping up to be a busy season for big listings in the financial hub. Microsoft Corp., OpenAI and other American companies announced plans to spend tens of billions of dollars on technology infrastructure in the UK, part of a series of business deals that coincide with President Donald Trump’s visit to the nation this week. TikTok’s US operations would be acquired by a consortium that includes Oracle Corp., Andreessen Horowitz and private equity firm Silver Lake Management LLC under a deal President Donald Trump is set to discuss with Chinese President Xi Jinping this week. Some of the main moves in markets:

Stocks

S&P 500 futures were little changed as of 11:47 a.m. Tokyo time Japan’s Topix fell 0.4% Australia’s S&P/ASX 200 fell 0.8% Hong Kong’s Hang Seng rose 1% The Shanghai Composite was little changed Euro Stoxx 50 futures rose 0.2% Currencies

The Bloomberg Dollar Spot Index was little changed The euro fell 0.1% to $1.1855 The Japanese yen was little changed at 146.54 per dollar The offshore yuan was little changed at 7.1032 per dollar Cryptocurrencies

Bitcoin was little changed at $116,974.53 Ether rose 0.9% to $4,541.04 Bonds

The yield on 10-year Treasuries was little changed at 4.03% Japan’s 10-year yield advanced one basis point to 1.605% Australia’s 10-year yield was little changed at 4.22% Commodities

West Texas Intermediate crude fell 0.1% to $64.44 a barrel Spot gold fell 0.2% to $3,681.19 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Carmeli Argana, Abhishek Vishnoi and Rob Verdonck.

©2025 Bloomberg L.P.