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(Bloomberg) — Asian shares rose Wednesday morning to follow Wall Street’s tech-led rebound from a selloff that shook global markets, as focus turns to the Federal Reserve’s rate decision and US mega-cap earnings.

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Japanese and Australian shares rose. Most other major markets in the region are closed for Lunar New Year holidays. US equity futures declined slightly after the S&P 500 rose 0.9% and Nasdaq 100 advanced 1.6% on Tuesday, as Nvidia Corp. rallied 8.9% following the largest one-day value loss in history. The dollar and oil gained after President Donald Trump talked about tariffs. 

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The share gains come after a rough start to the week on concern that a cheap artificial intelligence-model from Chinese startup DeepSeek might make valuations of the technology that has powered the bull market tough to justify. However, a re-evaluation saw the likes of Steve Cohen saying it may be good for the industry. Investors in the region will be looking toward the Fed decision on rates and the start of the Big Tech reporting season on Wednesday — a key test for AI bulls. 

“Was it a bit unnerving? Yes, for some. Should you panic? Not at all,” said Kenny Polcari at SlateStone Wealth. “If you talk to anyone that bought stock yesterday, they loved the opportunity to buy some of these names at a deep discount. In the end, no matter how this plays out, competition is good.”

In Australia, quarterly inflation data Wednesday may be key to whether the Reserve Bank finally embarks on a monetary easing cycle soon, and in turn, help decide the timing of an election due by May 17. 

As for earnings in the US, while profits from the so-called Magnificent Seven behemoths are still rising — and far outpacing the rest of the market — growth is projected to come in at the slowest pace in almost two years.

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“The dust is now settling after Monday’s long overdue AI reckoning, and while we still believe in the AI-driven productivity story, investing in this sector going forward may not be as easy as it was over the past two years,” said Emily Bowersock Hill at Bowersock Capital Partners. “We expect investors to be more discerning and selective when it comes to AI investing.”

Fed officials are widely expected to hold borrowing costs steady on Wednesday against a backdrop of healthy demand and stubborn inflation. Bond traders are ratcheting up bullish bets on US Treasuries in hopes that Fed Chair Jerome Powell signals a cut in March is firmly on the table. A survey conducted by 22V Research shows 67% of respondents expect the reaction to the Fed Wednesday to be “mixed/negligible,” 21% said “risk-off” and 12% “risk-on.”

The yield on 10-year Treasuries was little changed at 4.53%. The Bloomberg Dollar Spot Index remained steady. West Texas Intermediate oil advanced early on Wednesday after gaining 0.8% on Tuesday. 

“Simply put, the strong US fundamental story of strong growth, elevated inflation, and a more hawkish Fed continues to favor higher US yields and a stronger dollar,” Win Thin at Brown Brothers Harriman, wrote in a note. 

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By some measures, this Fed meeting is expected to be relatively uneventful for the stock market. 

“Markets are not expecting a cut and will focus on what the Fed projects for the rest of 2025,” said Bowersock Hill. “Both inflation and interest rates are going to remain higher for longer – we would not be surprised to see one rate cut in 2025, or even none.”

Key events this week:

• US Fed rate decision, Wednesday
• Tesla, Microsoft, Meta, ASML earnings, Wednesday
• Canada rate decision, Wednesday
• Eurozone ECB rate decision, consumer confidence, unemployment, GDP, Thursday
• US GDP, jobless claims, Thursday
• Apple, Deutsche Bank earnings, Thursday
• US personal income & spending, PCE inflation, employment cost index, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures fell 0.1% as of 9:12 a.m. Tokyo time
• Japan’s Topix rose 0.4%
• Australia’s S&P/ASX 200 rose 0.5%
• Euro Stoxx 50 futures rose 0.3%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.0433
• The Japanese yen was little changed at 155.45 per dollar
• The offshore yuan was little changed at 7.2754 per dollar

Cryptocurrencies

• Bitcoin rose 1.1% to $101,408.36
• Ether rose 1.2% to $3,089.74

Bonds

• The yield on 10-year Treasuries was unchanged at 4.53%
• Japan’s 10-year yield declined 2.5 basis points to 1.190%
• Australia’s 10-year yield was little changed at 4.42%

Commodities

• West Texas Intermediate crude rose 0.1% to $73.86 a barrel
• Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation.

—With assistance from Rita Nazareth.

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