Asian shares rise as Fed hike odds fade

Asian equity markets were mixed to modestly higher as investors awaited China’s July activity data and weighed ongoing Middle East tensions that kept oil prices volatile. The soft U.S. data tempered expectations for an imminent Federal Reserve rate hike, with rate-cut probabilities edging higher, while oil markets held around the $70-$100 range amid Iran and Hormuz tensions. Across the region, Japan’s Nikkei and broader MSCI Asia-Pacific indices advanced slightly, but shares in Hong Kong and several other markets fluctuated on the back of global inflation concerns and geopolitical risk. In the Middle East, Israeli strikes in southern Lebanon and the stalled Iran peace dynamics contributed to risk sentiment, with crude benchmarks hovering near the mid-to-high $80s per barrel. President Donald Trump continued to weigh in on military alignment and energy prices, signaling political pressure on oil and growth dynamics in the near term. Investors also monitored major economies’ inflation signals, including U.S. wholesale price data, which fed into expectations about potential delays to further rate hikes.