Muted dawn in Asia: Tech stumbles, bonds whisper cuts, all eyes on Wyoming

Asian markets walked into Thursday like a card room still heavy with last night’s smoke — muted, watchful, waiting for the next cue out of Jackson Hole. Futures in Tokyo were a touch softer, while contracts for China and Australia edged higher, small sparks in an otherwise cautious open. But for the Mega Tech Asia baton catchers, Wall Street’s big boards were another story: the S&P slipped 0.2%, the Nasdaq shed 0.6%, and the tape had all the feel of money bleeding out of stocks and back into the safety of bonds. Treasuries rallied across the curve, the 10-year yield easing a couple of basis points — a small move, but one that spoke volumes about traders crowding the inflation narrative to one side and leaning into the “cuts are coming” script.

The dollar finished the US session flat, the yen held steady after its prior bid higher, and oil caught a lift on data showing a drawdown in US inventories. The FX board is trading like a coiled spring — neither dollar bulls nor bears are willing to show full conviction until Powell clears his throat in Wyoming.

The July FOMC minutes read like a séance — inflation’s ghost still rattling chains around the table. But that was before the jobs report on August 1 hit the tape with a dull thud, exposing just how quickly the Fed’s script can go stale.

Eighteen policymakers around the mahogany table, and the majority pushed their chips onto “inflation risk outweighs labor risk.” That’s despite the jobs data that blindsided them just days later. Classic lag-risk — policy written in the rearview mirror while the market stares through the windshield. Swaps are still pricing September cuts with high conviction, but those wagers now walk into Powell’s Jackson Hole stage like gamblers ahead of the dealer — waiting to see whether he throws the dice on easing or doubles down on hawkish resolve.

Politics adds another layer of noise. Powell remains under Trump’s barrage, the White House pressing hard for cuts and already floating names for his replacement. Governor Lisa Cook, targeted by the President’s resignation demands, made clear she isn’t budging. The Fed’s institutional veneer remains, but the political knife fight is increasingly visible just under the surface.

Meanwhile, tech — the market’s glamour trade — is looking fragile. The Nasdaq 100 logged its second straight decline, and the “Magnificent Seven” chalked up their fourth consecutive drop, their worst run since April. It isn’t panic, but it feels like the herd is testing the fence. Rotation, in theory, should be healthy — money moving out of tech into other sectors. But with megacaps so top-heavy in the S&P, any stumble in the giants risks pulling the whole index down with them. Rotation can work only if tech stands tall; if it caves, the only rotation left is into cash.

In short, bonds are whispering “cuts ahead,” stocks are wobbling under their own weight, the Fed is stuck in its usual backward-looking maze, and traders are left circling the pit, waiting for Powell in Jackson Hole.

Perfection is priced, risk is crowded — and everyone knows perfection never survives first contact with reality.

Minutes in the rearview, markets on the road ahead

Most Fed officials walked into that late-July meeting still convinced the fire was burning in prices, not jobs. Around the big table, eighteen policymakers weighed the scales and most tilted toward inflation risk. Tariffs from Trump’s trade war hung over the discussion like a smoke machine, clouding the view and dividing the room between those nervous about labour softness and those still obsessed with sticky prices.

But the timeline betrays them. The FOMC met July 29–30. By August 1, the payrolls report dropped like a brick through the windshield — job growth cracking, revisions taking the shine off “solid” labour. The Fed had just called employment sturdy in its statement, only to be mugged by fresh data two days later. Classic case of monetary policy steering with the rearview mirror while markets drive by headlights.

Rates stayed put at 4.25–4.5%, framed as “uncertainty” and “moderating activity.” Yet wholesale inflation was already clocking its sharpest three-year surge, with companies pushing costs onto consumers and tariffs feeding the pipeline. A handful of officials warned openly that Trump’s trade war would keep inflation sticky well into next year. The minutes show a Fed more hawkish than the market might have wanted — no hint of imminent cuts, just a steady hand bracing for higher prices.

Rates traders were rather non-fussed. Bond yields moved lower across the curve, but are still waiting for the next dovish tug.

Now the stage shifts to Jackson Hole. Powell doesn’t need to commit until mid-September, which gives him every incentive to keep his powder dry. Expect a balanced-to-hawkish lean — inflation framed as the bigger risk, jobs data still under review. Another payroll, another CPI print: those will set the dice. Until then, the market will keep circling levels like sharks around the boat, waiting for the chair to toss in the chum.