Stocks get AI lift, dollar holds steady ahead of Fed decision

Asia's stock markets surged on Wednesday, fueled by renewed enthusiasm for artificial intelligence (AI) ahead of earnings reports from major tech companies in the United States. South Korean chipmaker SK Hynix reported a staggering seven-fold increase in quarterly operating profit, contributing to the market's positive mood. The rally is expected to continue as investors await the Federal Reserve's policy decision later in the day, with expectations of a steady outcome and focus on the Fed's outlook for interest rates amid ongoing Middle East tensions.

SK Hynix's impressive earnings results were among a series of positive AI-related announcements from Meta, SpaceX, and Broadcom, which have invigorated the AI sector. However, the market's focus will shift to the execution risk of sustained revenue growth from AI investments rather than just the earnings themselves. Analysts believe that investors will scrutinize how companies like Alphabet and Microsoft plan to translate AI spend into long-term profitability.

The dollar held steady against the US dollar index, trading near a two-week high at 102.37, while the New Zealand dollar fell over 1% following its central bank's decision to keep interest rates unchanged. Australia's dollar rose slightly as consumer prices climbed due to soaring fuel costs, but core inflation remained elevated.

Meanwhile, the Israeli shekel weakened following a deadlock in exit polls for the country's wartime election. Oil prices also saw gains, with Brent crude up 0.47% to $114.42 a barrel and US crude increasing 0.55% to $100.45.