Asian Stocks Climb on AI Hopes as Tech Surges, Gold Hits New Highs
Asian share markets aimed to extend recent substantial gains on Tuesday, fueled by optimism surrounding artificial intelligence that attracted investment into the tech sector. Meanwhile, expectations for additional US interest rate cuts continued to support a strong performance in gold. Wall Street reached another record as Nvidia revealed plans to invest up to $100 billion in OpenAI, with the initial data center equipment expected to be delivered in the latter half of 2026. “With US tech/AI currently in red-hot form, we’d need to see something leftfield to derail the upbeat flows that are the driving force of Oracle, Apple, Nvidia, Tesla, and some of the US hardware plays,” said Chris Weston.
The relentless ascent of technology was drawing investment from momentum funds and options traders, creating a nearly self-fulfilling cycle. Weston also observed that investors were hedging their exposure to equities by purchasing gold, which is currently another asset exhibiting strong momentum. The metal reached a new high at $3,755.47 per ounce, marking an increase of nearly 9 per cent for the month to date. The surge into technology has positively impacted chip sectors across various Asian markets, with South Korean stocks rising by 0.2 percent, having increased nearly 9 percent this month. Japan’s Nikkei was closed for a holiday but has climbed 6.5 per cent so far in September, while Taiwan has risen almost 7 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan increased by 0.3 percent, marking a 5.5 percent rise for the month. Chinese blue chips increased by 0.1 percent. European equity markets have generally fallen behind in the tech surge, with EUROSTOXX 50 futures rising by 0.1 percent on Tuesday. FTSE futures increased by 0.1 per cent, while DAX futures saw a modest rise of 0.2 per cent. S&P 500 futures and Nasdaq futures remained relatively stable after reaching new highs overnight.
Equities around the world have been supported by anticipations of additional rate cuts from the Federal Reserve following last week’s easing. Futures suggest a nearly 90 percent likelihood of an additional quarter-point rate cut in October, along with a 75 percent chance of a reduction in December as well. Markets continue to exhibit a persistent dovish stance, even in light of the mixed signals emanating from the Fed. On Monday, new Fed Governor Stephen Miran, selected by President Donald Trump, advocated for significantly lower rates. However, three of his colleagues expressed the need for the central bank to exercise caution regarding inflation. Fed Chair Jerome Powell will have the opportunity to share his insights later on Tuesday as he addresses the economic outlook and responds to questions regarding policy. On Tuesday, a series of PMI surveys regarding manufacturing will be released, offering insights into the global industry’s performance amid US tariffs. Treasuries have been supported by the expectation of lower short-term rates, although the market is preparing for an influx of government and corporate debt to manage this week.
The Treasury sale begins with $69 billion in two-year notes later Tuesday, followed by $70 billion in five-year notes and $44 billion in seven-year paper. The clock is ticking on a potential US government shutdown as the September 30 funding deadline approaches. In currency markets, the dollar exhibited its recent see-saw pattern, easing overnight following three consecutive sessions of gains. The euro held firm at $1.1809, recovering from a low of $1.1726 on Monday, while the dollar slipped to 147.68 yen from a peak of approximately 148.37. Sweden’s crown remained steady at 9.3497 per dollar as markets anticipated the central bank’s decision on potential rate cuts during an upcoming meeting. Futures suggest there is approximately a one-in-three likelihood of an easing. In commodity markets, oil prices remained under pressure as worries about oversupply overshadowed geopolitical tensions in Russia and the Middle East. Brent decreased by 0.2, settling at $66.46 a barrel, while US crude fell by 0.1 percent to $62.21 per barrel.
