Asia-Pacific markets set to trade mixed as Middle East tensions appear to ease

Asia-Pacific markets were set to open mixed Thursday, as investors continued to weigh the ongoing ceasefire between Israel and Iran.

Japan's benchmark Nikkei 225 was set to open higher, with the futures contract in Chicago at 39,055 while its counterpart in Osaka last traded at 38,950, against the index's last close of 38,942.07.

However, Australia's S&P/ASX 200 is slated to open slightly lower, with futures tied to the benchmark at 8,500, compared to its last close of 8,559.2.

Similarly, futures for Hong Kong's Hang Seng index stood at 24,326, pointing to a lower open compared to the HSI's last close of 24,474.67.

U.S. futures were relatively unchanged. S&P 500 futures traded around the flatline, as did Nasdaq 100 futures and futures tied to the Dow Jones Industrial Average.

Federal Reserve Chair Jerome Powell maintained a cautious stance on inflation and tariffs during his second day of Capitol Hill testimony, indicating rate cuts could be considered if the effects prove temporary.

As he did during his testimony Tuesday before the House Financial Services Committee, Powell would not put a timetable on when he thinks further interest rate cuts will be possible, despite the heavy pressure President Donald Trump has exerted to get the Fed to cut rates.

Overnight stateside, the three major averages closed slightly higher. The S&P 500 ended the session near the flatline at 6,092.16 as investors watched to see if the benchmark index could return to its all-time high. The Nasdaq Composite added 0.31% to close at 19,973.55. The Dow Jones Industrial Average slipped 106.59 points, or 0.25%, settling at 42,982.43.

S&P 500 closes near the flatline

The S&P 500 closed little changed on Wednesday, but remains within arms reach of its record high.

The broad market index was flat to finish the session at 6,092.16, while the Nasdaq Composite gained 0.31% to 19,973.55. The Dow Jones Industrial Average slipped 106.59 points, or 0.25%, to close at 42,982.43.

Powell keeps cautious tone on rates during Senate testimony

Federal Reserve Chair Jerome Powellin his second day of Capitol Hill testimony stuck to his cautious approach to tariffs and inflation, saying there will be room for rate cuts if the impact is temporary.

“It's a risk. We feel like, as the people who are supposed to keep stable prices for the benefit of the American people, we can manage that risk too,” the central bank leader said in an appearance before the Senate banking committee. “That's all we're doing. We're not deciding what to do yet.”

As he did during his testimony Tuesday before the House Financial Services Committee, Powell would not put a timetable on when he thinks further interest rate cuts will be possible, despite heavy pressure President Donald Trump has exerted to get the Fed to cut rates.

Earlier in the day, Trump called Powell “terrible” in a talk with reporters, and said he has three or four candidates in mind as a replacement, according to multiple media reports.

Despite the political pressure, most of the questions Powell faced during the two-day mandated hearing were cordial. Sen. Bernie Moreno (R-Ohio) was one of the few to take an overtly hostile one.

“You're costing this government $400 billion a year by refusing to lower interest rates,” Moreno said. “Nobody in this chamber has that kind of power to have a $400 billion impact on our economy. I just think you should consider whether you're really looking through a political lends because you don't like tariffs.”

Echoing Trump's criticism, Moreno said, “We got elected by millions of voters, you got elected by one person. He doesn't want you in that job.”