Wall Street’s three major indices hit new closing highs for the third consecutive trading day, driven by the artificial intelligence (AI) theme. This optimism spread to Asia on Tuesday, with most of the Asia-Pacific stock markets trending upwards, nearing historical highs. However, the Hong Kong and mainland Chinese markets moved in the opposite direction.
The spark of this uptrend came from the chip giant Nvidia, which announced a $100 billion investment in AI startup OpenAI. This news fueled market confidence in the future potential of AI to new heights, and Nvidia’s stock price rose by 3.9%. Asian semiconductor chains also benefited simultaneously, with stocks like TSMC seeing gains.
Other tech giants also performed strongly. Apple’s stock price rose by 4.3% due to strong demand for the iPhone 17, prompting Wedbush, a well-known brokerage firm, to raise its target price. Tesla’s stock price also increased by 1.9%. Overall, the technology sector led gains in the S&P 500, closing up by 1.7%.
With the tech sector leading the way, the S&P 500 rose by 0.44% to 6,693.75 points, the Nasdaq increased by 0.70% to 22,788.98 points, and the Dow Jones Industrial Average rose by 0.14% to 46,381.54 points.
The S&P 500 has already risen by 13.8% year-to-date, with a 3.6% increase in September.
As Wall Street’s tech stocks surged, the Asia-Pacific region’s stock markets generally rose on Tuesday. The South Korean Kospi index rose by 0.69% after the opening, and the smaller-cap Kosdaq index also gained by 0.28%.
The Taiwan Weighted Index also benefited, briefly rising by over 1.6% to reach 26,307.30 points after the opening. Overall, the Taiwanese stock market has risen by nearly 7% so far this month.
The Japanese stock market was closed on Tuesday due to a national holiday celebrating “Autumnal Equinox Day,” but the cumulative gain for September has already reached 6.5%.
However, the powerful typhoon “Ragasa” is approaching Hong Kong, posing the first major test since the implementation of the “Typhoon Signal” rule.
The Hang Seng Index in Hong Kong continued to decline after Tuesday’s opening, with a decrease of 0.97% by midday. The Chinese stock market also performed poorly, with the CSI 300 index of blue-chip stocks falling by 1.19% and the Shanghai Composite Index dropping by 1.23%.
In terms of market sentiment, Chris Weston, research director at Pepperstone brokerage, stated, “Tech and AI in the U.S. stock market are currently hot. It may take some unexpected factors to disrupt the optimistic capital flows driving Oracle, Apple, Nvidia, Tesla, and some U.S. hardware stocks.”
Regarding interest rates and policy signals, futures markets indicate a 90% probability of a 25 basis point rate cut by the Fed in October, and a 75% probability of further easing in December.
However, there seems to be a division among some officials at the Fed. On Monday, Stephen Miran, a new Fed governor chosen by President Trump, advocated for a significant rate cut, while his three colleagues expressed the need for caution regarding inflation.
On Tuesday, Fed Chairman Jerome Powell will deliver remarks on the economic outlook and take policy questions.
On the same day, multiple countries will release the Purchasing Managers’ Index (PMI) survey results, allowing the market to observe global industry performance under U.S. tariffs.
On Friday, the U.S. Personal Consumption Expenditures (PCE) price index will be published, a closely watched inflation indicator.
A substantial amount of U.S. Treasury bonds will be issued this week, but expectations of a decline in short-term interest rates are providing support for U.S. bonds. On Tuesday, the U.S. Treasury will issue $69 billion in two-year notes, followed by $70 billion in five-year notes and $44 billion in seven-year notes.
Meanwhile, gold prices hit a historic high amidst the stock market surge, surpassing $3,755 per ounce. This indicates that the momentum in gold prices is being driven not only by traditional “safe-haven” demand but also by strong expectations of multiple Fed rate cuts in the future.
In the commodity markets, despite tensions in Russia and the Middle East, concerns about oversupply outweighed these influences, keeping oil prices suppressed.
Brent crude oil prices fell by 0.2% to $66.46 per barrel, while U.S. crude oil prices dropped by 0.1% to $62.21 per barrel.