Tech leads Asian rally as Trump plays ‘chess game’ with Iran and oil spikes

Tech shares lifted Asian markets on Wednesday as investors reduced expectations of a US interest rate hike, despite a rise in oil prices amid dwindling hopes for a resolution to the Middle East conflict. Japanese and Korean chip manufacturers drove the technology sector's gains. The US Bureau of Labor Statistics reported a loss of 23,000 jobs in July, with growth in May and June revised downward, signaling a slowing US economy.

The Fed's chances of raising interest rates in September fell to around 43 percent from 64 percent a week earlier. The S&P 500 reached a new high, while the Nasdaq gained more than 1 percent, benefiting tech firms that thrive on lower borrowing costs. The positive sentiment extended to Asia, with Tokyo, Seoul, and Hong Kong markets all up.

National Australia Bank's Rodrigo Catril noted that the labor market data challenges the Fed's imminent rate hike expectations, but it does not signal a dovish shift. The dollar recovered from earlier losses, while oil prices rose around 1 percent as Iran's Revolutionary Guards vowed to keep the Strait of Hormuz closed until the US meets their demands.

Iran has listed several conditions for reopening the waterway, mirroring those in the June agreement, which included a fund for Iran's reconstruction. Iran's Revolutionary Guards declared their blockade strategy would continue until the US agrees to all their terms, describing it as a "chess game."