Meanwhile, the Federal Reserve opted to keep its key policy rate steady, ranging between 3.5% and 3.75%. Chair Jerome Powell dampened expectations for imminent rate cuts, citing that inflation levels have not decreased as significantly as anticipated.

February’s producer price index, which measures the variation in wholesale prices, saw a surge of 0.7%, surpassing the 0.3% forecast by economists surveyed by Dow Jones.

Despite these developments, the Federal Reserve’s “dot plot” continues to suggest potential rate cuts in the years 2026 and 2027, although the exact timing remains uncertain.

Despite that, the U.S. central bank’s “dot plot” still projects a cut in 2026 and another in 2027, even though the timing is unclear.

The Iran war continues to fuel energy worries. International benchmark Brent crude futures rose 3.83% to settle at $107.38 per barrel.

U.S. oil prices were trading at elevated levels as well, with West Texas Intermediate futures closing marginally higher at $96.32 per barrel.

Investors in Asia will look toward the Bank of Japan decision, with the bank expected to hold rates at 0.75%.

South Korea’s Kospi lost 2.56%, leading losses in Asia after being the top gainer in the region on Wednesday, while the small-cap Kosdaq saw a smaller loss of 1.73%.

Chip heavyweights Samsung Electronics and SK Hynix saw losses of over 3%.

Japan’s Nikkei 225 was down 2.47%, while the broad-based Topix was 1.82% lower.

Australia’s S&P/ASX 200 started the day down 1.5%.

Hong Kong’s Hang Seng index futures were at 25,479, lower than the HSI’s last close of 26,025.42.

Overnight in the U.S., the 30-stock Dow lost 1.63%, ending at 46,225.15, reaching a new low this year. The index also closed below its 200-day moving average.

The S&P 500 fell 1.36%, while the Nasdaq Composite dropped 1.46%.

—CNBC’s Sean Conlon, Pia Singh and Jeff Cox contributed to this report.