Asian stocks climb as sliding oil prices buoy sentiment

Asian stocks climbed on Tuesday as falling oil prices, following comments from US President Donald Trump, lifted market sentiment ahead of a critical US inflation report. Brent crude futures settled at their lowest level since early September, trading just below $100 per barrel, after investors bet on potential talks between the US and Iran.

The US-Iranian conflict, which began at the end of February, had fueled global inflation concerns, prompting central banks to raise interest rates in recent months. Nick Twidale, chief market strategist at ATFX Global, noted the developments suggested a potential resolution to the conflict, but warned that markets could quickly reverse course if talks faltered.

The sharp drop in oil prices helped to ease inflation worries and contributed to a surge in Asian stocks following last week's market decline triggered by Democrats' victories in the US midterm elections. South Korea's KOSPI gained over 5%, while Japan's Nikkei increased by approximately 3% early in the trading session. The MSCI's Asia-Pacific index climbed 1.5%, moving away from its seven-month low reached last week.

The S&P 500 and Nasdaq both recorded their biggest one-day gains since April, with the S&P 500 closing up 2.35% and the Nasdaq rising 2.7%. Analysts believe that the reset in investor expectations is positive, with the AI trade showing signs of stabilizing. Earnings from tech firms, particularly those related to AI, will be closely watched as investors assess the impact of the cost of AI implementation.

Nvidia, the world's second-most valuable company, is under scrutiny as its board investigates whether CEO Jensen Huang was the victim of a foreign intelligence operation. Shares of Nvidia fell 4.2% following concerns about Huang's relationship with a Chinese businesswoman. Despite the turmoil, portfolio manager Daniel Morgan of Synovus Trust remains confident in Nvidia's ability to maintain its dominance in the GPU AI chip market, even if Huang were to relinquish a significant role.