Wall Street is buying the hike, not fading it, and Asia is running with that hand-off into the US open.
The Fed delivered its first hike since 2023 Wednesday, 25bp to 3.75%-4.00% with a hawkish dot plot showing most officials penciling in another move this year, and stocks sold off into the close as the 10-year brushed 5% and the 2-year hit its highest since mid-2024. That selloff reversed hard in the final session, with the S&P clawing back roughly a percent and semis up 3% as oil rolled over and yields backed off the highs. Asia picked up the baton: Nikkei jumped on a weaker yen that's pushing USD/JPY back toward 155-156, exporters and chip-adjacent names like Nintendo and Mitsubishi Heavy leading, while mainland China and Hong Kong lagged, with the Hang Seng and Shanghai both softer as the yuan sits quiet against the dollar. KOSPI is tracking the same semis-led tape that lifted Wall Street overnight. US futures are extending the bounce into the open, S&P and Nasdaq both firmly green, with today's data slate, jobless claims, housing starts and permits, pending home sales, the next test of whether the hawkish dot plot actually bites into activity.
The risk: this is a relief rally sitting on top of a Fed that just told you more hikes are coming and a 10-year flirting with 5%. If claims or housing data run hot, or Warsh doubles down on the hawkish tone in any follow-up commentary, the bounce reverses fast and yields resume the climb that broke stocks on Wednesday. Yen weakness past 156 also reopens the carry-unwind risk that's hit tape before.