Markets Slip as Uncertainty Over Fed Leadership and Geopolitical Risks Ripples Through Asia

Equity markets across Asia and Europe traded unevenly as uncertainty about who will succeed the U.S. central bank chair sat atop a stack of fresh headlines that sapped risk appetite. U.S. futures opened weaker, setting a risk-off tone that contrasted with modest early gains in parts of Europe where major indices ticked higher at the open. Several major Asian exchanges fell, led by Hong Kong where port-related and infrastructure names were punished after a Central American court decision raised fresh questions over a concession tied to a prominent operator. Shanghai, Tokyo and Taiwan also gave up ground while Jakarta bucked the regional weakness, rallying after the Indonesia Stock Exchange announced a senior leadership departure following steep swings earlier in the week. The uncertainty over Fed succession was compounded by reports of a Justice Department inquiry touching on Fed-related conduct, which added an institutional-risk overlay that investors said complicated an already fragile policy narrative. Corporate earnings amplified intra-market dispersion: a major cloud and software company plunged about 10% on disappointing guidance and elevated spending plans, while some smartphone and AI-linked names showed stronger top-line growth but muted market reactions as investors focused on strategic roadmaps. Safe-haven flows were mixed — precious metals that had rallied pulled back sharply as traders booked profits and reassessed allocations, while bitcoin and other crypto assets moved decisively lower amid concentrated long liquidations and ongoing spot-ETF outflows. Oil gave back some of the prior session’s gains tied to Middle East tensions as traders took profits and reset disruption risk premia. Currency markets reflected the uneven sentiment: the dollar firmed against the yen and other G10 peers, while the euro weakened versus the dollar as traders balanced policy expectations and safety flows. Operational and geopolitical developments — from a major U.S. winter storm that disrupted travel and regional power delivery to a fatal federal-agent shooting that elevated political tensions — contributed to a risk-sensitive backdrop that hit assets with shallower liquidity especially hard. Taken together, the mix of Fed leadership uncertainty, domestic legal probes, local governance and court rulings, adverse weather and trade-tariff rhetoric suggests volatility is likely to remain elevated until clearer policy signals and legal or geopolitical de-escalation emerge.