The MSCI Asia Pacific Index climbed 0.8%, extending its biggest one-day gain in a month. The Kospi Index, a bellwether for AI investments, jumped over 5%. The regional gains followed the Nasdaq 100’s best session in three weeks, as a 5.2% surge in a key semiconductor gauge signaled renewed demand for beaten-down chipmakers.
Adding to the optimism, Nvidia Corp. said its latest chip designs are now reaching customers, while Intel Corp. rose on plans for further job cuts. After the close, Super Micro Computer Inc. surged following an update that pointed to a growing order backlog. American Depositary Receipts of Taiwan Semiconductor Manufacturing Co. climbed 5.5% after the Nikkei reported the company is set to raise prices by up to 10%.
Early attention in Asia is on the yen, which slid past 163 per dollar for the first time since 1986, increasingly testing Japanese authorities’ resolve to intervene.
Elsewhere, crude oil prices climbed, reigniting inflation concerns that pushed Treasury yields to the highest in two months. Brent advanced 0.6% to $91.52 a barrel as US President Donald Trump minimized the prospect of immediate talks with Iran.
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The rally in technology stocks followed weeks of volatility in the year’s best-performing corner of the market as investors questioned whether massive AI spending will translate into commensurate returns. The focus now shifts to earnings from Alphabet Inc. and Tesla Inc. starting Wednesday, with lofty expectations leaving little room for disappointment. “The burden of proof has changed. Investors are no longer asking whether companies can withstand the uncertainty,” said Bret Kenwell at eToro. “They want growth and guidance strong enough to justify elevated valuations.”
Elsewhere, gold and silver advanced on dip-buying. Bullion advanced as much as 2% to trade above $4,080 an ounce, while silver jumped as much as 5% on Tuesday.
Treasuries fell, pushing 10- and 30-year yields to the highest levels in about two months on Tuesday, as a surge in crude oil prices stoked concern that inflationary pressures will prompt the Federal Reserve to raise interest rates.
Meanwhile, the US plans to impose a 100% tariff on generic drugs imported to the US beginning in August 2028, Trump said in a social media post Tuesday.
Still, investors remain focused on company results. US earnings growth should continue to support stocks in the second half of the year, even as near-term bullish positioning and macro headwinds weigh on share prices, according to Goldman Sachs Group Inc. strategists.
Nearly 20% of companies in the S&P 500 by market value are slated to report results this week. Alphabet and Intel will give investors a clearer read on how AI spending is reshaping the tech industry. Intel reports Thursday.
While the recent selloff in AI-related shares has raised questions about the durability of the trade, some strategists see it as a reset rather than a sign of deteriorating fundamentals.
“The long-term AI backdrop appears to be intact,” said Adam Turnquist at LPL Financial. “The recent correction appears more consistent with a healthy reset following a parabolic advance than a fundamental breakdown in the AI investment theme.”
