Fed holds rates steady; December hike likely, analysts say

Asian shares and U.S. futures were mixed Thursday, with technology stocks under pressure after Alphabet Inc.’s quarterly revenue came in lower than investors expected. The Federal Reserve held interest rates steady as it wrapped up its policy meeting Wednesday, and oil prices fell more than 1% even as U.S. officials warned that renewed military action against Iran could come after the Nov. 3 midterm elections.

Shares of Alphabet, the Google parent, fell about 10% in after-hours trading. The California-based technology giant posted quarterly revenue that disappointed investors, raising questions over whether it can generate enough sales to justify its huge investments in artificial intelligence. Microsoft, by contrast, gained nearly 3% in after-hours trading after logging better-than-expected earnings results.

Across Asia, Japan’s Nikkei 225 edged up 0.2% to 64,073.17. SoftBank Group, an OpenAI investor, fell 0.5%. South Korea’s Kospi lost 2.2% to 5,880.25.

Samsung Electronics, a key component of the Korean market, sank 5.4% despite announcing strong quarterly results, as its latest shareholder return policy arrangements disappointed some investors. Memory chipmaker SK Hynix rose 1.6%, a day after its shares soared 10.9% on better-than-expected quarterly results.

Taiwan’s Taiex, which has also benefited from the AI boom, declined 1.9%. Hong Kong’s Hang Seng edged less than 0.1% higher to 23,101.86. The Shanghai Composite shed 0.9% to 3,647.12, and Australia’s S&P/ASX 200 gained 0.5% to 8,888.50.

On Wednesday, Wall Street’s benchmark S&P 500 added 0.3% and the Dow Jones Industrial Average gained 0.2%, while the technology-heavy Nasdaq composite climbed 0.3%. According to Federal Reserve Economic Data, the Nasdaq composite stood at 26,549.85 as of Oct. 29.

In the bond market, the yield on the 10-year U.S. Treasury eased to below 5.00% after briefly jumping to around 5.04% on Wednesday; FRED data put the yield at 4.99% as of Oct. 29. The yield on the two-year Treasury steadied at 4.68%, down from higher than 4.77% on Wednesday.

Two Fed officials favored a rate hike at this week’s meeting, and analysts said a rate hike in December is likely since inflation remains too high. Markets are watching for the outcome of a European Central Bank meeting later Thursday. The Bank of Japan is expected to stand pat when it wraps up its policymaking meeting Friday.

In other dealings early Thursday, Brent crude, the international standard, fell 1.2% to $110.32 per barrel — still well above the roughly $72 a barrel level before the Iran war began in late February. Benchmark U.S. crude fell 1.3% to $101.46 per barrel.

The U.S. dollar fell to 157.72 Japanese yen from 157.84 yen. The euro traded at $1.1146, down from $1.1154.