Asian stocks steady as AI, Middle East jitters recede
Doubts about demand for computer chips sent tech-heavy markets in Asia into some of their steepest falls in years during a turbulent week.
Asian markets and US equity futures opened steadier on Monday, recovering from a turbulent week marked by concerns over computer chip demand, according to MSCI's Asia-Pacific index. The index gained 0.8% after losing 4.6% last week, while Japan's Nikkei index climbed 2.5% and South Korean shares rose slightly. Taiwan's benchmark index also made modest gains after experiencing its sharpest weekly decline in two decades earlier in the week.
The surge came after Democrats' victories in the US midterm elections raised concerns about potential regulatory restrictions on artificial intelligence and data centers. Tech companies like CoreWeave, Applied Materials, and Cisco Systems are expected to release earnings reports this week, potentially impacting AI-related stocks due to the high costs associated with building out AI infrastructure.
Meanwhile, Nvidia's internal investigation into CEO Jensen Huang's ties to a Chinese intelligence official could also contribute to market volatility. Despite the overall positive sentiment, analyst Kyle Rodda warned that the market still faces challenges following the midterm elections and a lackluster earnings season, with Magnificent Seven companies failing to meet earnings expectations.
Brent crude prices dropped to $97.49 per barrel following Donald Trump's statement that he would likely not order fresh attacks on Iran as long as peace talks progress. The Federal Reserve's decision to raise interest rates in December has gained traction following an unexpected jobs report showing a significant increase in employment.
The US dollar strengthened amid expectations of a rate hike, while cryptocurrencies experienced a downturn as investors anticipated stricter regulations in a Democratic-controlled US Congress.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
