Asia markets hit records on AI euphoria, yen surges again

SINGAPORE: Stocks leapt, oil prices sank and the dollar dropped on Wednesday after U.S. President Donald Trump touted “great progress” towards a “final agreement” with Tehran, while momentum in AI-driven trades accelerated.

Trump said he would briefly pause an operation escorting ships through the Strait of Hormuz, which carries about a fifth of global oil and has been blockaded by Iran since late February, triggering a global energy crisis.

The news sent Brent crude tumbling 1.6% to $108.07 per barrel, while S&P 500 e-mini futures were up 0.3%.

MSCI’s All-Country World Index rose 0.4% to a fresh record alongside similar milestones for its Emerging Markets benchmark and its broadest index of Asia-Pacific shares outside Japan, which jumped 2.8%. The share surge was led by a 6.6% charge for South Korea’s Kospi, which cleared the 7,000 mark for the first time.

Elsewhere in foreign exchange markets, the yen strengthened sharply in afternoon trading, gaining as much as 1.8% to 155 against the dollar as traders remained on the lookout for fresh intervention by authorities in Tokyo in support of the beleaguered currency.

Stocks edge up in Asia, oil flat amid Middle East uncertainty

“There’s a bit of optimism around a U.S.-Iran ‘deal’ at the moment; it’s possible the authorities decided that was a good moment to give the yen an extra nudge,” said Thomas Mathews, head of markets for Asia Pacific at Capital Economics in Wellington. “That said, it might just be thin holiday-affected trade; best to wait and see how it fares towards the end of the week.”

Stocks on Wall Street hit fresh records on Tuesday as the S&P 500 rose 0.8% and the Nasdaq Composite gained 1%.

“Investors bought and continue to add to positioning in the 2026 winners,” said Chris Weston, head of research at Pepper stone Group Ltd in Melbourne. “There has been some buying in S&P 500 materials stocks, but it’s tech that continues to attract the bulk of flows, notably in Apple and the memory plays.”

As the Seoul market reopened after a holiday, Samsung Electronics jumped 14.8%, topping a $1 trillion market value, overtaking Berkshire Hathaway and closing in on Walmart.

“Due to the capex spend we are seeing from hyperscalers in the U.S., the earnings growth trajectory for sectors such as semiconductors, tech hardware, industrials and materials in Asia exceeds anything I have seen in a long time,” said Rushil Khanna, head of equity investments for Asia at Ostrum, an affiliate of Natixis Investment Managers.

“This capex is leading to material value creation in Asia as the provider of the picks and shovels to the AI ecosystem,” he said.

Shares in Advanced Micro Devices jumped 16.5% in extended trading as the company forecast second-quarter revenue above Wall Street expectations on Tuesday, helped by keen demand for its dead-centre chips as cloud-computing companies accelerate spending on AI infrastructure.

In the foreign exchange markets, the U.S. dollar index, which measures the greenback’s strength against a basket of six currencies, was down 0.3% at 98.02.

The euro stood at $1.1736 and sterling was at $1.3588 , both up around 0.4% so far on the day.

The Australian dollar fetched $0.7246, rising about 0.9% to the highest since June 2022, buoyed by improved risk appetite and underpinned by a third straight interest-rate hike a day earlier. The New Zealand dollar was up 1% at $0.5947.

The yield on the U.S. 10-year Treasury bond was flat at 4.424%.

Gold was 2.1% higher at $4,651.84. In cryptocurrencies, bitcoin nudged 0.5% lower to $81,264.67 while ether was down 0.8% at $2,364.40.