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September 17, 2025 – 07:55

(Bloomberg) — Asian stocks swung between small gains and losses ahead of the Federal Reserve’s policy decision with investors speculating the central bank will cut interest rates for the first time this year.

The MSCI Asia Pacific Index erased opening losses to trade flat. 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 18% after a stock upgrade. US equity-index futures were little changed, while contracts indicated gains for Europe.

A gauge of the dollar was little changed after two days of declines that pushed it to around levels last seen in March 2022. Gold held near a record after rising above the $3,700-an-ounce level for the first time.

Attention is firmly on the Fed meeting with investors seeking clues on the path of interest rates that will shape the outlook ahead. Some bond traders have stepped up options wagers that the central bank will deliver at least one half-point cut across this year’s three remaining policy meetings.

“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 Group Holding Ltd. shares advanced as much as 5.7% after Goldman Sachs Group 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.

Japanese bonds rose after a 20-year debt sale drew the strongest demand since 2020, as higher yields lured investors despite political uncertainty.

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.

The Fed started its two-day meeting Tuesday amid signs of a weakening job market and mounting pressure from President Donald Trump to lower rates. Powell’s dovish speech last month at the Jackson Hole symposium helped boost expectations for rate cuts.

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.”

In other corners of the market, Treasuries held their gains with the yield on two-year notes at 3.50%. Oil steadied after a three-day gain as traders assessed the fallout from Ukrainian attacks on Russian crude infrastructure.

Corporate Highlights:

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 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 Trump is set to discuss with Chinese President Xi Jinping this week. Nestlé SA Chairman Paul Bulcke will step down early after investors questioned his handling of the ouster of the food company’s former chief executive officer due to an undisclosed romantic relationship with a subordinate. 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. Some of the main moves in markets:

Stocks

S&P 500 futures were little changed as of 6:54 a.m. London time Nasdaq 100 futures were little changed The MSCI Asia Pacific Index was little changed Japan’s Topix fell 0.5% Australia’s S&P/ASX 200 fell 0.7% Hong Kong’s Hang Seng rose 1.7% The Shanghai Composite rose 0.4% Euro Stoxx 50 futures rose 0.3% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1856 The Japanese yen was little changed at 146.52 per dollar The offshore yuan was little changed at 7.1027 per dollar The British pound was unchanged at $1.3647 Cryptocurrencies

Bitcoin was little changed at $116,997.06 Ether was little changed at $4,499.64 Bonds

The yield on 10-year Treasuries was little changed at 4.02% Japan’s 10-year yield was unchanged at 1.595% Australia’s 10-year yield was little changed at 4.22% Commodities

Spot gold fell 0.3% to $3,678.29 an ounce West Texas Intermediate crude fell 0.1% to $64.43 a barrel This story was produced with the assistance of Bloomberg Automation.

–With assistance from Carmeli Argana and Joanne Wong.

©2025 Bloomberg L.P.