Asian Stocks Surge as Wall Street Recovers and Oil Prices Stabilize Amid Iran De-Escalation Hopes
Asian stocks advanced on Tuesday, buoyed by a strong performance on Wall Street, which recorded its most significant single-day gain since April. The rally was further supported by a decline in oil prices following U.S. President Donald Trump’s decision to postpone military strikes against Iran. Japan’s Nikkei 225 rose 2.6% to 60,279.37, while South Korea’s Kospi climbed 4% to 5,219.37. Other notable gains included Taiwan’s Taiex, which increased by 3.4%, and Hong Kong’s Hang Seng, which advanced 0.4% to 24,535.74.
Technology stocks led the gains across various markets. Shares in SoftBank Group surged 15% ahead of its earnings announcement. In Japan, Tokyo Electron rose 5.6%, and Advantest gained 3.4%. South Korea’s Samsung Electronics climbed 4.6%, while SK Hynix advanced 5.6%. Taiwan’s technology sector also saw positive movement, with chipmaker TSMC rising over 1% and MediaTek gaining more than 7%.
The rally in Asia followed a strong session on Wall Street on Monday. The S&P 500 jumped 2.3% for a second consecutive gain, leaving it 3.4% below its record high set last month. The Dow Jones Industrial Average rose 2.2%, while the Nasdaq Composite gained 2.7%. U.S. stocks had previously experienced a sharp sell-off after Democratic victories in the midterm elections raised concerns about potential restrictions on AI data centers. The fall in oil prices further supported equities by easing inflation concerns, with Brent crude down around 0.9% to $91.74 a barrel and U.S. benchmark crude falling 1% to $85.97.
Oil prices declined after Trump indicated he would hold off on new military strikes against Iran, stating that a resumption of fighting was “highly unlikely” if progress was made in negotiations. He mentioned “positive momentum” towards ending the conflict after a meeting with Qatar’s prime minister. However, market strategist Nick Twidale from ATFX Global cautioned that a significant gap remains between diplomatic efforts and a lasting peace agreement. He noted that any signs of faltering negotiations could lead to a rapid increase in oil prices as traders reassess geopolitical risks.
Despite the broader technology-led recovery, Nvidia shares fell around 4.3% on Monday, extending pressure on the company amid reports regarding its CEO Jensen Huang. Nvidia’s board is investigating whether Huang was the target of a foreign intelligence operation related to his reported relationship with a Chinese business executive. The board stated it had “no reason to believe” that national security or company secrets were compromised, but the inquiry will examine all available information. China’s foreign ministry dismissed the allegations as “nothing but smears against China.”
Investors are also closely monitoring earnings reports from technology companies this week, including AI cloud computing firm CoreWeave, amid ongoing concerns about the costs and profitability of the AI infrastructure boom. Nvidia is scheduled to report its results next week. Attention is also turning to U.S. inflation data due later on Tuesday, which could impact expectations for the Federal Reserve’s interest rate decisions. Economists expect consumer prices to have risen 0.3% in October, while core inflation is forecast to increase 0.2%. Traders are pricing in an 84% chance of an interest rate hike next month, up from 74% a week earlier. In currency markets, the U.S. dollar rose to 158.06 Japanese yen from 157.90 yen, while the euro slipped to $1.1222 from $1.1266.
