(May 2): Stocks in Asia opened lower on Thursday as U.S. equities fell after the Federal Reserve pushed back on market expectations that its next move would be a rate cut. The dollar advanced.

Sydney and Seoul shares fell, while futures in Hong Kong were little changed. China and Japan remain closed for holidays. The Fed’s decision to hold rates steady and Chairman Jerome Powell’s subsequent comments the central bank has no bias to either tighten or ease policy -- noting that weak inflation readings may be “transitory” -- sparked a modest repricing of assets from the dollar to bonds and equities.

Earlier, the S&P 500 Index posted its biggest decline in almost six weeks, wiping gains in the wake of Apple Inc.’ s sales forecast. Two-year Treasury yields turned positive, while the U.S. currency erased a deep loss to strengthen against major peers.

Read more: ‘Leaning Too Dovish’: Wall Street Adjusts to Powell on Inflation

“The markets have by and large convinced themselves the Fed’s next move will be a cut, and it’s going to happen sometime soon,” said Jeffery Elswick, director of fixed income at Frost Investment Advisors, which has $4.7 billion in assets under management. “The scenario of the largest probability does not include a cut. Or the data gets worse, and then the markets will be proven right for a different reason.”

The market action suggests that expectations were a bit too high with respect to the likelihood of a much more dovish outcome, including the potential for a cut, Bob Miller, BlackRock Inc. head of Americas fundamental fixed income, told Bloomberg TV.

Fed officials also lowered the rate on one of their policy levers, which may have been misinterpreted as raising the probability of a rate cut. The interest paid on excess reserves dropped to 2.35 percent from 2.40 percent as the Fed wants to stimulate more trading in the fed funds market in an attempt to get better control over short-term rates.

Developments in the trade conflict between America and China were also on the radar, with U.S. Treasury Secretary Steven Mnuchin calling the latest round of meetings “productive.” Negotiations will continue in Washington next week.

Elsewhere, oil slid as a report showed U.S. crude stockpiles swelled to their highest levels since 2017 while American production set a new record. Holidays across much of Asia, Europe and Latin America crimped trading volumes Wednesday.

Here are some notable events this week:

Companies reporting earnings include: HSBC, Macquarie and Royal Dutch Shell. The Bank of England sets interest rates Thursday. Friday brings the U.S. jobs report: non-farm payrolls are projected to rise by 187,000 in April. Economists expect an unemployment rate of 3.8 percent, with average hourly earnings growth picking up to 3.3 percent.

These are the main moves in markets:

Australia’s S&P/ASX 200 Index fell 0.7 percent as of 10:22 a.m. in Sydney. South Korea’s Kospi index lost 0.3 percent. Futures on Hong Kong’s Hang Seng Index were little changed. S&P 500 futures edged lower. The S&P 500 Index decreased 0.8 percent Wednesday.

The yen dipped to 111.47 per dollar The Bloomberg Dollar Spot Index advanced 0.1 percent. The euro traded at $1.1202. The British pound was at $1.3052. The offshore yuan was steady at 6.7322 per dollar.

Futures on Treasuries were stable in early Asian trading. The yield on 10-year Treasuries was little changed at 2.5 percent and two-year yields rose almost four basis points to 2.30 percent Wednesday. The cash market won’t trade until London opens because of the Tokyo holiday. Australia’s 10-year bond yield fell one basis point to 1.77 percent.

West Texas Intermediate crude dipped 0.2 percent to $63.47 a barrel. Gold was steady at $1,276.13 an ounce. - Bloomberg