(Nov 12) : Asian stocks were set for gains, tracking a Wall Street rally led by technology giants as bets grew that the artificial-intelligence trade powering the bull market is far from over.
Equity-index futures for Japan, Taiwan and South Korea pointed higher after the Nasdaq 100 jumped 2.3%, putting the tech-heavy gauge on track for its best week since May. AI computing supplier CoreWeave Inc. surged 25% on an upbeat outlook, while Nvidia Corp. gained 2.9%.
Further signs of robust AI demand came from OpenAI, whose quarterly revenue reached US$10 billion, while Anthropic PBC’s initial public offering was said to be oversubscribed.
The upbeat tone in equities contrasted with moves elsewhere as investors braced for tighter US monetary policy. The dollar climbed to an 18-month high, with traders fully pricing a quarter-point Federal Reserve hike next month and assigning a small chance of a half-point move.
The equity rebound suggests investors are looking past the recent tech selloff as strong earnings and sustained AI spending reinforce confidence in the investment theme. The gains also signal that concerns over the impact of a Democratic sweep of Congress on the AI buildout are beginning to ease.
“While the recent bloodbath in tech stocks may have scared off nervous investors, American corporations are a machine that aren’t showing any major signs of slowing down,” said Hardika Singh at Fundstrat Global Advisors.
While cash trading in Treasuries was closed Wednesday for Veterans Day, futures pointed to further losses after hotter-than-expected inflation cemented wagers on Fed hikes.
Meanwhile, global benchmark Brent crude rebounded to near US$92.60 a barrel after two days of declines. The move came after a senior Iranian official rejected the prospect of giving up enriched uranium, signaling that peace talks between Washington and Tehran remain stalled.
Some strategists remain constructive on AI after the recent volatility. “The way we look at it, 95% of the correction has already happened,” Mike Wilson, chief US equity strategist and chief investment officer at Morgan Stanley, said on Bloomberg Radio. “We’re pretty confident that the AI build-out is going to continue.”
Nvidia rebounded after two days of losses even as scrutiny of Chief Executive Officer Jensen Huang’s affair with an alleged Chinese spy continued. Two key House Republicans said Wednesday that Congress is prepared to subpoena Huang to provide answers about the affair.
Elsewhere, gold slipped on Wednesday, extending losses triggered by the high US inflation print and hawkish remarks from Fed officials. Bullion fell as much as 1.2% to trade below US$4,000 an ounce during US hours.
“It’s all about the continued re-pricing of the Fed,” said Jeremy Stretch, a strategist at CIBC. “A discussion of either 50-basis-point hike or an acceleration in the pace of tightening from once a quarter is now real.”
uploaded by Isabelle Francis