September 17, 2026 — Asian stocks moved slightly higher Thursday as investors digested the Federal Reserve’s first interest-rate increase in more than three years, while rising short-term U.S. Treasury yields lifted the dollar to a seven-week high.
The MSCI index for Asia-Pacific shares outside Japan advanced 0.3%, while Japan’s Nikkei rose 0.3%. Chinese blue-chip shares fell 0.2%, and Hong Kong’s Hang Seng index declined 0.7%.
U.S. stock futures pointed to a stronger opening. Nasdaq futures climbed 0.7%, while S&P 500 futures gained 0.6%. European equity futures were also higher, up about 0.5%.
The Federal Reserve raised its policy rate by a quarter percentage point, bringing the target range to 3.75%-4.00%. While the move had been broadly anticipated, the central bank’s projections suggested another increase could take place before the end of the year.
The decision quickly affected short-term bond markets. Two-year Treasury yields surged overnight to their highest level since July 2024 before later retreating one basis point to 4.7174%.
The dollar strengthened as short-term yields increased. Its index against major currencies reached 100.36, its highest level in seven weeks, after rising 0.7% overnight in its biggest single-day gain in three months.
A stronger dollar and higher U.S. yields can weigh on commodities and emerging-market assets by making dollar-denominated investments relatively more attractive.
Oil prices surrendered some of their recent gains following the dollar’s advance. Investors continued to monitor whether persistent inflation could prompt the Federal Reserve to keep increasing borrowing costs.
Financial markets were already incorporating expectations for further tightening. Futures showed a 53% probability of another quarter-point increase as early as October, while three increases were priced into the wider tightening cycle.
The Fed’s move also influenced expectations surrounding technology stocks. Tai Hui, Asia-Pacific chief market strategist at JPMorgan Asset Management, said investors would have to reconsider asset valuations, especially among technology companies, if the central bank retains a hawkish stance into 2027.
Even with the change in monetary policy, markets did not experience a broad selloff. Gains across Asian equities indicated that investors continued to balance the potential effects of higher interest rates with expectations for ongoing economic growth and corporate earnings.
The focus was shifting to the Bank of England, which was widely expected to leave its policy rate unchanged Thursday. The Bank of Japan, meanwhile, was expected to raise rates Friday.
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