Global Markets: AI Stocks Drive Asian Gains as Oil Edges Higher

Asian equity markets rose on Wednesday, buoyed by a surge in artificial intelligence stocks that had lifted Wall Street the previous day. The rally came as investors weighed new earnings reports from major technology firms and anticipated the Federal Reserve's next move on interest rates.

South Korea's Kospi index led the regional gains, climbing 5.6% to close at 5,952.41 in early trading. The movement was driven by strong results from memory chipmakers. SK Hynix shares rose 7%, reaching their highest level in two weeks. The company reported record operating profit of 83.3 trillion won, which is equivalent to $62.8 billion, for the final quarter. That figure represented a nearly seven-fold increase from the same period a year earlier and exceeded market estimates.

Samsung Electronics shares surged 8.5% ahead of its scheduled third-quarter earnings report for Thursday. In Japan, the benchmark Nikkei 225 index gained 1.3% to 64,094.51. Semiconductor maker Kioxia Holdings saw its stock climb 9.6% in the lead-up to its own quarterly earnings release on Friday.

Gains were not universal across the region. The Hang Seng index in Hong Kong fell 0.7% to 23,041.32. Conversely, the Shanghai Composite index edged up 0.5% to 3,666.50. Taiwan's Taiex index rose 1.8%, and Australia's S&P/ASX 200 gained 0.4% to reach 8,889.10. In New Zealand, the Reserve Bank surprised markets by keeping its benchmark interest rate at 2.75%. The S&P/NZX 50 Index edged 0.1% higher following the announcement.

The momentum in Asia mirrored trends in the United States. On Tuesday, the S&P 500 rose 0.6%, moving within 1.2% of its all-time high set earlier this month. The Dow Jones Industrial Average added less than 0.1%, while the Nasdaq composite climbed 1.2%. Although the majority of stocks within the S&P 500 fell, gains from influential AI stocks offset those losses. Investors had previously worried about the cost for companies to borrow money to build data centers and purchase AI chips, but the sector posted another winning day.

Broadcom stock climbed 4% after the company announced a $63 billion financing deal. The agreement allows several Wall Street firms to help Anthropic access Broadcom's XPU AI accelerators and networking solutions. Nvidia added 0.9%, acting as one of the strongest forces pushing the S&P 500 higher alongside Broadcom. CoreWeave, a company that borrows money to buy AI chips for cloud rental, jumped 7.9%.

Not all sectors performed well. Boeing fell 10.7% after reporting a larger loss for the latest quarter than analysts had expected. Consumer sentiment also showed mixed signals. Confidence among U.S. shoppers had tumbled recently due to high inflation, but a report on Tuesday indicated that U.S. consumer confidence improved in October. This improvement came when economists had predicted further weakening.

In the bond market, Treasury yields held relatively steady on Wednesday. This occurred one day before the Federal Reserve is scheduled to announce its latest decision on interest rates. The Fed hiked the fed funds rate for the first time in three years last month to slow inflation. Wall Street widely expects the central bank to hold rates steady at the upcoming meeting. The yield on the 10-year Treasury edged down to 4.99% from 5.00% late Monday.

Commodity prices also moved higher. Brent crude oil, the international standard, rose 0.4% to $109.82 a barrel. U.S. benchmark crude gained 0.5% to reach $100.37 per barrel. In currency markets, the U.S. dollar rose to 157.99 Japanese yen from 157.91 yen. The euro fell to $1.1124 from $1.1127.