Global Market Today: Asian shares rise as chipmakers gain, oil climbs
MSCI’s Asia Pacific equities gauge climbed 0.8%, with South Korea’s Kospi — a bellwether for AI investments — climbing over 3%. US equity-index futures also pared earlier losses spurred by Alphabet Inc.’s spending plans. Samsung Electronics Co. and SK Hynix Inc. both climbed over 4% as the South Korean chipmakers are seen as the picks and shovels of global AI buildout.
Alphabet slid more than 3% in extended trading after raising its capital spending for the year. International Business Machines Corp. edged lower on a lower full-year sales outlook, while Tesla Inc. fell 4% after missing estimates, as disappointing megacap earnings weighed on sentiment.
Attention is also on oil prices after Iran-backed Houthi militants said they targeted two Saudi Arabian tankers in the Red Sea, escalating the Middle East conflict and threatening deeper supply disruptions. Global benchmark Brent advanced 2% to around $96 a barrel.
Oil’s gains sent Treasuries lower Wednesday, with the two-year yield rising four basis points. The US 30-year bond yield has held above 5% for the longest stretch since the dawn of the financial crisis, echoing investor concerns about a growing debt pile and sticky inflation.
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Alphabet’s results mark the start of a critical test for the AI trade. After last week’s technology selloff, which sent a gauge of chipmakers into a bear market, earnings over the next two weeks will be scrutinized for signs that hundreds of billions of dollars invested in AI are beginning to generate commensurate returns.
“We remain constructive on AI’s growth story, but we favor a more balanced exposure across the AI value chain — from semiconductors and hardware to megacap tech and more defensive areas of the industry,” said Ulrike Hoffmann-Burchardi at UBS Chief Investment Office. “Investors should also ensure diversification beyond AI.”
Alphabet now expects capital spending to reach as much as $205 billion this year, eclipsing its previous guidance and far exceeding Wall Street expectations. The company is accelerating investment in AI computing capacity to meet surging demand, executives said in a call with analysts.
As the first US megacap tech company to report earnings this season, Alphabet is setting the tone for a sector that has collectively committed hundreds of billions of dollars to AI infrastructure. Investors will be watching next week’s results from Microsoft Corp., Meta Platforms Inc. and Amazon.com Inc. for guidance on capital spending.
“AI optimism remains intact, but the burden of proof has shifted decisively onto management teams,” wrote Mark Malek, chief investment officer at Siebert Financial. “Future earnings calls will increasingly focus on return on invested capital rather than AI ambitions.”
In Asia, the yen will remain in focus after sliding to its weakest level since 1986 earlier this week.
While the Bank of Japan is widely expected to move rates roughly once every six months, it’s open to moving earlier than that timeframe if needed, people familiar with the matter said, pointing to signs that inflation is becoming entrenched.
“Japanese policymakers are facing an uphill battle to support the yen while the price of oil jumps back up towards $100 per barrel,” said MUFG Bank strategist Lee Hardman.
Geopolitical tensions also remained in focus. President Donald Trump vowed to hit Iranian bridges and power plants if Tehran continued attacking vessels in the Strait of Hormuz. Iran responded with its own warning.
The renewed escalation has fueled concerns that higher energy prices could keep inflation elevated and complicate the Federal Reserve’s policy outlook. With the central bank meeting next week, money markets are pricing about a 30% chance of a rate increase and a 70% probability that policymakers hold steady.
“Diplomatic efforts to end the conflict in the Middle East have effectively stalled as military strikes continue with no sign of easing,” said Ian Lyngen at BMO Capital Markets. “The rally in energy continues to weigh on the Treasury market as hostilities between the US and Iran intensify.”
