{"slug": "asian-stocks-choppy-after-south-koreas-us-2-trillion-rout-fed-leaves-markets-on", "title": "Asian stocks choppy after South Korea’s US$2 trillion rout, Fed leaves markets uncertain on rates", "summary": "Asian stocks struggled for direction on Thursday after a US$2 trillion rout in South Korea's equity market and a divided US Federal Reserve left investors uncertain on interest rates. Chipmakers were in focus as investors fretted about returns from massive AI spending, with the Kospi rising 4% in choppy trading but facing a 12% weekly decline. Fed Chair Kevin Warsh vowed to contain inflation but declined to offer guidance on future rate action.", "body_md": "# Asian stocks choppy after South Korea’s US$2 trillion rout, Fed leaves markets uncertain on rates\n\nAsian chipmakers are in focus as investors fret about returns from massive AI spending\n\n[SINGAPORE] Asian stocks struggled for direction on Thursday (Jul 30), nursing steep losses for the week on mounting investor jitters around the artificial intelligence trade, while a [divided US Federal Reserve kept interest rates steady](https://www.businesstimes.com.sg/international/global/divided-us-fed-leaves-rates-unchanged-warsh-vows-not-waver-inflation), leaving bond markets questioning where rates are headed.\n\nBrent futures slipped below US$90 per barrel, after jumping over 7 per cent a day earlier as [fighting in the Middle East escalated](https://www.businesstimes.com.sg/international/global/us-strikes-iran-widening-war-engulfs-more-countries), although data showed tankers continued to make their way out of the region despite the continued missile and drone strikes.\n\nThe greenback was on the defensive after the US central bank held steady although the split decision left investors confused on whether the Fed will see through rate hikes to combat inflation.\n\nYields on longer-dated US Treasuries rose to 19-year highs.\n\nAsian chipmakers have been the centre of attention this week after a deep sell-off in South Korean stocks that [from the country’s equity market](https://www.businesstimes.com.sg/companies-markets/south-koreas-us2-trillion-stock-rout-breaks-records-sk-hynix-results-disappoint) rocked markets and investors fretted about the returns from massive AI spending.\n\nThe Kospi rose 4 per cent in choppy trading on Thursday, but is staring at a 12 per cent weekly decline that prompted Finance Minister Koo Yun-cheol to apologise for the introduction of [single-stock leveraged exchange-traded funds](https://www.businesstimes.com.sg/companies-markets/capital-markets-currencies/unease-over-korea-leveraged-etfs-grows-lawmakers-demand-fix).\n\n“Given that the fundamental thesis remains intact, there does appear to be an irrational, panic-like element to the current selling,” said Gina Kim, portfolio manager for emerging market equities at Nordea Asset Management in Singapore.\n\n“I cannot comment on when the panic will stop as such but some indicators to look out for would be margin balances in both Taiwan and Korea for retail investors. Both are declining but we would ideally need to see some levelling off,” said Kim.\n\nChipmaker Samsung Electronics said its operating profit jumped 19-times to a record in the second quarter, helping lift beaten-down investor sentiment.\n\nMSCI’s broadest index of Asia-Pacific shares outside Japan rose over 1 per cent in early trading. Japan’s Nikkei was 2 per cent higher, but set for a 3 per cent drop in the week.\n\nEarnings from US megacaps Meta and Microsoft outlined the contrasting fortunes of the companies that are able to showcase their ability to generate cash even as they spend to build out AI infrastructure.\n\nMicrosoft said it expects to keep generating cash through the fiscal year 2027 that just started, lifting its shares, while Meta reported a [91 per cent drop in second-quarter free cash flow](https://www.businesstimes.com.sg/companies-markets/metas-zuckerberg-defends-ai-bets-sceptical-investors-amid-disappointing-q3-revenue-forecast), sending its stock down.\n\nNasdaq futures rose 1.2 per cent in Asian hours while European futures were 0.3 per cent higher.\n\n## Fed looking to markets for cuts\n\nIn a post-meeting media conference, Fed chair Kevin Warsh vowed to contain inflation but [declined to offer any guidance on what action would be needed by the central bank](https://www.businesstimes.com.sg/international/us-fed-chair-warsh-rebuked-investors-craving-real-inflation-fight).\n\nWarsh noted that bond yields since the Fed’s last monetary policy meeting had risen notably – investors have priced in interest rate increases – and he welcomed that move, even while saying it did not mean the central bank needed to ratify it with action.\n\nYields on 30-year US bonds were at 5.2039 per cent, having hit their highest since June 2007 at 5.2273 per cent late in New York trading.\n\n“What we heard was a fairly defiant message about bringing inflation back to target, albeit with very little substance on exactly how that would be achieved,” said Chris Weston, head of research at Pepperstone.\n\nFed funds futures now implied around a 60 per cent chance the Fed would lift rates at its next meeting in September and had 33 basis points of tightening priced in by year-end.\n\n“The Fed is likely to face ongoing questions around its credibility,” said Kerry Craig, global market strategist at JP Morgan Asset Management.\n\n“The gap between the Fed’s rhetoric and its actions may pose a challenge for market pricing. A new chair faces a divided committee and a bond market that’s starting to question the central bank’s resolve.” REUTERS\n\nDecoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.\n\nShare with us your feedback on BT's products and services\n\n[TRENDING NOW](/pulse?ref=trending-now)\n\nKeppel H1 net profit drops 59% to S$155 million on legacy rig impairments, M1 deal fallout\n\nYeoh Pei Xien: YTL’s third-gen scion with a pastor’s heart\n\nSingtel explores Nasdaq-SGX dual listing for data centre arm Nxera, local data centre Reit\n\nUOB CEO’s youngest child Grant Wee turns burnout into a wellness business", "url": "https://wpnews.pro/news/asian-stocks-choppy-after-south-koreas-us-2-trillion-rout-fed-leaves-markets-on", "canonical_source": "https://www.businesstimes.com.sg/companies-markets/capital-markets-currencies/asian-stocks-choppy-after-south-koreas-us2-trillion-rout-fed-leaves-markets-uncertain-rates", "published_at": "2026-07-30 02:25:14+00:00", "updated_at": "2026-07-30 02:53:04.232175+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-infrastructure", "ai-chips"], "entities": ["Federal Reserve", "Kevin Warsh", "Samsung Electronics", "Microsoft", "Meta", "Nordea Asset Management", "Gina Kim", "Kospi"], "alternates": {"html": "https://wpnews.pro/news/asian-stocks-choppy-after-south-koreas-us-2-trillion-rout-fed-leaves-markets-on", "markdown": "https://wpnews.pro/news/asian-stocks-choppy-after-south-koreas-us-2-trillion-rout-fed-leaves-markets-on.md", "text": "https://wpnews.pro/news/asian-stocks-choppy-after-south-koreas-us-2-trillion-rout-fed-leaves-markets-on.txt", "jsonld": "https://wpnews.pro/news/asian-stocks-choppy-after-south-koreas-us-2-trillion-rout-fed-leaves-markets-on.jsonld"}}