Stock markets across Asia and the Pacific were set for broad gains on Wednesday, a bright spot in a week otherwise dominated by worry over the Middle East and rising borrowing costs.
Equity index futures pointed to gains in Japan, South Korea, and Taiwan, while contracts in Australia were little changed. The improvement in sentiment came after oil prices fell overnight, easing some of the pressure that had been building on markets as investors weighed developments in the ongoing US-Iran stalemate over the Strait of Hormuz. When oil prices retreat, it typically eases fears about inflation and gives central banks more room to avoid tightening policy further, which is part of why the mood in Asian trading improved even as the underlying geopolitical questions remained unresolved.
A second factor lifting sentiment was a rally in US semiconductor stocks, which carried over into Asian trading given how closely linked chipmakers in Japan, South Korea, and Taiwan are to global technology supply chains. President Trump's rejection of new regulations on artificial intelligence also appeared to boost shares tied to the AI theme, since investors read it as reducing the odds of near-term restrictions on how AI companies and their chip suppliers can operate. Chipmakers and equipment suppliers across the region have been among the most sensitive stocks to any signal about the regulatory path for AI, given how much of their revenue now comes from AI-related demand.
The gains follow a choppy stretch for global markets more broadly. US benchmarks finished little changed on Tuesday after a volatile few sessions driven by swings in oil prices and Treasury yields, and investors in Asia have largely been taking their cues from that back-and-forth in Washington and New York. For markets in the region, the combination of cooler oil prices and a friendlier tone on AI regulation offered a rare moment of alignment after weeks of mixed signals.
Traders in the region will continue watching US Treasury yields and any fresh developments in the US-Iran talks, since both have been the main drivers of sentiment in Asian trading in recent weeks.
Why did Asian markets rise Wednesday?
Falling oil prices and a rally in semiconductor and AI-linked stocks, helped along by the White House's stance against new AI rules, both lifted sentiment.
Which Asian markets were affected?
Futures pointed to gains in Japan, South Korea, and Taiwan, while Australian futures were little changed.