Finance

Asian Markets’ Cautious Optimism: How Tech Earnings and Central Bank Moves Will Shape the Week

Asian markets consolidated gains as tech earnings loomed and central banks signaled easing, impacting currencies and commodities.

byAndres Castro

October 28, 2025, 10:12 AM

Businessman in a dark suit checks his smartphone while standing in front of a large digital screen displaying global stock market indices.

This photo captures a businessman intently checking his mobile device against a backdrop of a large digital stock board displaying various international indices and market data. By Keisuke_N / Shutterstock.com.

Executive Summary

The Federal Reserve is widely expected to cut rates on Wednesday, with market focus on signals for further easing and the potential end of quantitative tightening, while Canada’s central bank is also projected to cut rates.

Investors are keenly awaiting earnings reports from the “Magnificent Seven” U.S. tech giants to justify their current high valuations, following Qualcomm’s strong performance.

Asian share markets generally consolidated recent significant gains, driven by ongoing hopes for de-escalation in global trade tensions, with China’s CSI300 index breaching the 4,000 mark.

The Story So Far

Current global market activity, including the consolidation of recent gains and shifts in bond and currency markets, is primarily driven by ongoing hopes for de-escalation in global trade tensions and the widespread anticipation of robust earnings reports from major U.S. technology companies. This environment is further shaped by expectations for central bank policy, particularly a widely projected quarter-point rate cut by the Federal Reserve, which signals potential further easing and impacts borrowing costs across various economies.

Why This Matters

Global financial markets are anticipating a significant shift towards easier monetary policy, with the U.S. Federal Reserve and Canada’s central bank widely expected to cut interest rates, potentially lowering borrowing costs and influencing currency valuations. Concurrently, the upcoming earnings reports from major U.S. tech giants are crucial for validating their high market valuations, even as some, like Amazon, are implementing substantial job cuts to control expenses. These developments, alongside fluctuating commodity prices influenced by OPEC+ oil output decisions and a correction in gold, indicate a period of cautious rebalancing across global economies and investment strategies, with geopolitical discussions, such as those between Japan’s PM and President Donald Trump, continuing to shape trade and investment outlooks.

Who Thinks What?

Investors and market participants are consolidating recent gains, driven by hopes for de-escalation in global trade tensions and anticipation of strong earnings reports from major U.S. technology companies, while also keenly awaiting signals for further easing from central banks.

The Federal Reserve and Canada’s central bank are widely expected to cut interest rates this week, with the Fed’s decision being scrutinized for signals of further easing and the potential end of its quantitative tightening program.

Eight OPEC+ nations are inclined to approve another modest increase in oil output for December, a decision reportedly influenced by Saudi Arabia’s aim to regain market share.

Asian share markets generally consolidated their recent significant gains on Tuesday, driven by ongoing hopes for de-escalation in global trade tensions and anticipation of strong earnings reports from major U.S. technology companies. Bond markets across the U.S. and Canada signaled expectations for lower borrowing costs this week, while the dollar eased. Meanwhile, gold prices retreated from record highs, and oil saw modest declines.

Asian Markets Consolidate Gains

Japan’s Nikkei 225 index eased 0.2% after a 2.5% surge on Monday, which had pushed its year-to-date gains to nearly 27%. South Korean stocks dipped 1.2%, partially reversing Monday’s 2.6% jump, even as data showed the economy surpassed third-quarter forecasts. MSCI’s broadest index of Asia-Pacific shares excluding Japan edged down 0.2%, while China’s CSI300 blue chips added 0.2%, and the Shanghai Composite Index breached the 4,000 mark for the first time since mid-2015.

Tech Earnings and Corporate Actions

On Wall Street, tech stocks continued to lead gains overnight, with Qualcomm jumping 11% following the unveiling of two new artificial intelligence chips for data centers. Investors are now keenly awaiting earnings reports from the “Magnificent Seven” tech giants, including Microsoft, Alphabet, Apple, Amazon, and Meta Platforms, to justify their current high valuations. Separately, Amazon is reportedly planning to cut as many as 30,000 corporate jobs starting Tuesday in an effort to curb expenses.

Central Bank Watch

In bond markets, 10-year U.S. Treasury yields held at 3.98% ahead of the Federal Reserve’s meeting on Wednesday. A quarter-point rate cut by the Fed is widely expected, with market participants focusing on whether the central bank will signal further easing in December and potentially end its quantitative tightening program, which involves reducing its balance sheet. Canada’s central bank is also projected to cut rates this week, while the European Central Bank and the Bank of Japan are anticipated to maintain current policy settings. The Bank of Japan is expected to debate conditions for resuming rate hikes, though political factors may delay such a move.

Currencies and Gold Trends

Expectations of a dovish Federal Reserve outlook led the dollar to slip 0.4% against the yen, trading at 152.20. The euro nudged up to $1.1660, while the dollar index eased 0.3% to 98.643. Gold prices hovered around $4,000 per ounce, as a recent 9% drop over five sessions reportedly squeezed leveraged money out of crowded trades. Neil Shearing, group chief economist at Capital Economics, commented that what began as fundamentally supported price rises now appears driven by retail enthusiasm, and he forecasts the price to fall to $3,500/oz by the end of 2026.

Oil Markets and Geopolitical Developments

Oil prices saw slight declines following a Reuters report indicating that eight OPEC+ nations are inclined to approve another modest increase in oil output for December. This decision, to be discussed at their upcoming meeting on Sunday, comes as Saudi Arabia reportedly seeks to regain market share. Brent crude dropped 0.2% to $65.51 a barrel, and U.S. crude eased 0.2% to $61.20 per barrel. In a separate development, Japan’s new Prime Minister Sanae Takaichi met with President Donald Trump in Tokyo to discuss defense ties, trade, and a $550 billion package of U.S. investments agreed upon earlier this year.

Market Outlook

Overall, global markets on Tuesday reflected a cautious optimism driven by trade hopes and anticipated corporate earnings, balanced by central bank policy expectations and shifts in commodity valuations.