Asian Shares Rise Following US Gains Fueled by AI Demand,Focus Shifts to Economic Resilience
Asian shares are trending upward following positive gains in US markets,driven largely by strong performance from companies linked to artificial intelligence (AI). However, market optimism is broadening beyond high-profile tech names, with investors increasingly focused on corporate resilience and the potential for renewed Federal Reserve interest rate cuts. This positive momentum faces a key test as earnings season begins.
According to Mark Haefele at UBS Global Wealth Management, “With price-to-earnings ratios for today’s tech giants still well below those of the tech firms at the peak of the dotcom bubble, we think the bull market remains intact.”
Nvidia Corp. spearheaded advances in US mega-cap stocks, with CEO Jensen Huang reporting “really, really” high demand for Blackwell chips.
Attention in Asia is now centered on China‘s economic performance following the Golden Week holiday. Investors are evaluating whether renewed enthusiasm surrounding AI can offset indications of subdued consumer spending. Holiday spending data revealed a cautious approach from households, with more affordable road trips favored over flights and box office sales falling short of expectations.
This weaker consumption trend coincides with an AI surge that propelled global tech stocks to new highs during China’s holiday period, spurred by companies highlighting connections to OpenAI.
The CSI 300 Index has experienced five consecutive months of gains through September – its longest winning streak as 2017 – largely driven by optimism in the chip sector. This enthusiasm stems from DeepSeek’s unveiling of an updated AI model and Huawei Technologies Co.’s plans to double production of its leading AI chips. The index is currently up 18% for the year.
Geopolitical developments include a statement from Donald Trump indicating that both Israel and Hamas have agreed to terms for the release of all hostages held in Gaza, representing a significant breakthrough in US-brokered negotiations to end their two-year conflict.
Amid a relatively quiet economic calendar due to the US government shutdown, investors analyzed the minutes from the latest Federal Reserve meeting.Officials demonstrated a willingness to consider further rate cuts this year, but expressed caution due to ongoing inflation concerns. Bloomberg’s dollar index reached its highest level since August.
Luis Alvarado at Wells Fargo Investment Institute emphasized the Fed’s data-dependent approach, stating, “The Fed is clearly not on a preset path and data dependency is now more necessary than before, especially as officials attempt to calibrate between conflicting goals.” He added, “We still expect two more quarter-point rate cuts by the end of this year, and two more next year.”