AI tech stocks lead Asia markets, South Korea Composite Index up 5%, oil prices extend gains, US CPI becomes key variable

Strong earnings reports from technology stocks have reignited AI trading enthusiasm, sending Asian stock markets broadly higher on Wednesday, with US equity index futures rising in tandem. Meanwhile, ongoing Middle East tensions have pushed oil prices up for a sixth consecutive day, as investors focus on US inflation data due later in the day.

South Korea’s KOSPI index extended gains to 5%, with both Samsung Electronics and SK Hynix surging over 8%, serving as the main drivers of this rebound. AI cloud infrastructure company CoreWeave soared 16% after the bell, while Super Micro Computer climbed 7.6% in after-hours trading, both posting earnings beats that helped lift Nasdaq 100 index futures by 0.3%. The MSCI Asia Pacific stock index rose 0.7% overall, with Asian tech stocks up 2.6% and the regional semiconductor benchmark up 1.8%.

In oil, Brent crude climbed 0.6% to $89.45 a barrel, extending its six-day winning streak—the longest since April this year. Stalled US-Iran negotiations are the main catalyst, with ongoing geopolitical risk premium providing support for crude markets.

OCBC strategists Moh Siong Sim and others wrote in a note: “Today’s inflation data may be crucial for September FOMC pricing, while the persistently range-bound dollar continues to favor carry trades.”

• South Korea’s KOSPI index extended gains to 5%, with both Samsung Electronics and SK Hynix up more than 8%.
• S&P 500 futures rose 0.1%. Nasdaq 100 index futures rose 0.3%.
• USD/JPY hovered near 159.40, close to the key 160 level.
• 10-year US Treasury yield held steady at 4.69%.
• Gold rebounded from Tuesday’s decline, rising 0.7% to around $4,400 an ounce.
• Brent crude rose 0.6% to $89.45 a barrel, extending its six-day upward streak.
• Bitcoin rose 0.1% to $63,772.65.

Earnings season for tech companies has become the core catalyst behind the current rebound. CoreWeave’s robust revenue growth highlighted sustained strong demand for AI infrastructure, while Super Micro’s revenue guidance also exceeded market expectations. Both pieces of news boosted investor confidence in AI technology trades.

The KOSPI index, seen as a key barometer for AI investing, was further supported by ongoing market focus on the shareholder return policies of Samsung Electronics and SK Hynix, and media coverage regarding investment plans by Singapore’s Temasek Holdings, which lifted overall market sentiment.

Eastspring Investments portfolio manager Christina Woon said in a Bloomberg Television interview: “So far, this earnings season has provided some degree of reassurance, particularly in tech trades.”

Goldman Sachs chief China equity strategist Kinger Lau also noted in a Bloomberg TV interview: “Earnings will be key. The internet sector’s outperformance in July was mainly driven by valuation re-rating, but now it’s time to refocus on earnings themselves.”

The crude oil market maintained its strength, primarily due to the lack of progress in US-Iran negotiations over the Strait of Hormuz. Although the Pakistani defense minister said the two countries were “close to some sort of agreement,” the positions on both sides appear to have hardened, clouding the outlook for talks.

KCM Trade chief market analyst Tim Waterer wrote in a research note: “As time goes by with issues unresolved, market anxiety is steadily rising. Traders are increasingly concerned that the demands from both sides only add complexity, thereby reducing the chance of a workable deal in the near term.”

Last week, there were reports of a breakthrough in the negotiations, which drove risk assets higher. The subsequent fading of optimism, however, layered uncertainties on top of rising oil prices, making investors generally cautious ahead of the inflation data release.

US July CPI data will be released later Wednesday, becoming the most closely watched macro event for current markets. According to a Bloomberg survey of economists, July CPI is expected to rise 0.1% month-on-month, after declining 0.4% the previous month. Bloomberg noted that after a marked increase in energy price pressures during the early months of the Iran war, there is hope for a gradual easing as situation evolves.

If inflation data comes in below expectations, it would help ease market concerns over the Fed’s policy path—three FOMC members already voted for a rate hike at the July meeting.

OCBC strategists Moh Siong Sim and others wrote: “Today’s inflation data may be crucial for September FOMC pricing, while the persistently range-bound dollar continues to favor carry trades.”

In addition, USD/JPY hovered near 159.40, close to the 160 level. Markets closely watch whether Japanese authorities will once again intervene in the foreign exchange market. The dollar weakened against most other G10 currencies, 10-year US Treasury yields stayed steady at 4.69%, and gold rebounded 0.7% from Tuesday’s dip to around $4,400 an ounce.