In the Asian trading session on Wednesday, stock markets surged, oil prices plummeted, and the U.S. dollar weakened following remarks from President Donald Trump regarding significant advancements towards a conclusive deal with Iran. This announcement coincided with a rise in activities related to artificial intelligence (AI) investments.
Trump indicated a temporary halt in military operations that escort vessels through the Strait of Hormuz, a critical waterway through which approximately 20% of the world’s oil is transported. Iran has maintained a blockade in this region since late February, exacerbating a global energy crisis. As a result of this news, Brent crude oil prices fell by 1.2% to $108.51 per barrel, while S&P 500 e-mini futures saw an increase of 0.3%.
The MSCI Asia-Pacific index, excluding Japan, rose by 2.3%, reaching new heights, with South Korea’s Kospi index experiencing a notable 5.1% increase, surpassing the 7,000 points threshold for the first time.
Analysts at Westpac noted that the markets experienced a newfound sense of tranquility and stability, attributing the reduced risk of escalating tensions in the Middle East to U.S. Defense Secretary Pete Hegseth’s confirmation that a ceasefire remained intact, despite recent exchanges of hostilities between the U.S. and Iran. This shift in sentiment bolstered risk appetite, leading to a recovery in U.S. and European equity markets, while oil prices adjusted from their earlier gains.
On Wall Street, stocks reached new record highs on Tuesday, with the S&P 500 advancing by 0.8% and the Nasdaq Composite increasing by 1%.
Chris Weston, head of research at Pepperstone Group Ltd in Melbourne, remarked that investors are actively purchasing stocks that are expected to perform well in 2026, particularly in the technology sector, with significant interest in Apple and memory chip manufacturers. There has been some investment in S&P 500 materials stocks as well.
Following a holiday, the Seoul stock market reopened to a 12% surge in shares of Samsung Electronics, which surpassed a market capitalization of $1 trillion, overtaking Berkshire Hathaway and nearing Walmart’s valuation.
Rushil Khanna, head of equity investments for Asia at Ostrum, an affiliate of Natixis Investment Managers, commented on the substantial capital expenditure (capex) from major U.S. companies, indicating that growth in sectors such as semiconductors, technology hardware, industrials, and materials in Asia is unprecedented. He emphasized that this investment is driving significant value creation in Asia, positioning the region as a key player in the AI ecosystem.
Shares of Advanced Micro Devices surged by 16.5% in after-hours trading after the company projected second-quarter revenue that exceeded Wall Street forecasts, spurred by strong demand for its chips as cloud computing firms ramp up their AI infrastructure investments.
In the currency markets, the U.S. dollar index, which gauges the currency’s performance against a basket of six others, ended a three-day winning streak, dipping 0.1% to 98.236. The euro traded at $1.1724 and the British pound at $1.3577, both reflecting an increase of around 0.3% for the day.
The Australian dollar rose to $0.7227, increasing by approximately 0.6% to reach its highest level since June 2022, bolstered by a growing risk appetite and a recent third consecutive interest rate hike. Meanwhile, the yield on the U.S. 10-year Treasury bond remained unchanged at 4.424%.
Gold prices increased by 1.2%, reaching $4,609.59 per ounce. In the cryptocurrency market, Bitcoin saw a decline of 0.9%, trading at $80,881.12, while Ether fell by 1% to $2,358.09.
