Chipmakers Drive Global Tech Rally as Asia Stocks Climb Amid Rising Oil and US-Iran Tension

Chipmakers Drive Global Tech Rally as Asia Stocks Climb Amid Rising Oil and US-Iran Tension​

Stocks across Asia continued their upward trend for a second consecutive day, driven by the resilience shown in chip manufacturers central to the artificial intelligence boom. This rally provided crucial support despite rising oil prices stemming from renewed escalation concerns surrounding the US-Iran conflict.

The MSCI Asia Pacific Index advanced 0.8%, marking its strongest one-day gain in a month. The Kospi Index, recognized as a bellwether for AI investments, saw a jump exceeding 5%. These regional gains followed a stellar performance by the Nasdaq 100, which reported its best session in three weeks after a key semiconductor gauge surged 5.2%, signaling renewed demand for previously beaten-down chipmakers.

The Resilience of Asian Tech Stocks and AI Indicators​

The optimism seen in Asia was bolstered by positive movements from technology titans. Nvidia Corp. announced that its latest chip designs are now reaching customers. Meanwhile, Intel Corp. rose following announcements regarding planned job reductions. Super Micro Computer Inc. surged after providing an update indicating a growing order backlog, adding momentum to the sector's gains.

American Depositary Receipts of Taiwan Semiconductor Manufacturing Co. climbed 5.5% after Nikkei reported that the company intends to raise prices by up to 10%. This strong response highlights the intense market focus and underlying demand within the global semiconductor industry.

Geopolitical Heat Rises as Oil Climbs and US-Iran Tensions Intensify​

Crude oil prices rose, reigniting inflationary concerns and pushing Treasury yields to their highest levels in two months. Brent advanced 0.6% to $91.52 a barrel as US President Donald Trump minimized the possibility of immediate talks with Iran.

The geopolitical instability was highlighted by early attention given to the Japanese yen, which slid past 163 per dollar for the first time since 1986. This movement is increasingly testing the resolve of Japanese authorities regarding intervention in the currency market. In a related development, Trump announced plans to impose a 100% tariff on generic drugs imported to the US starting in August 2028.

Market Focus Shifts to Earnings: The Scrutiny of AI Valuations​

The rally among technology stocks followed weeks characterized by intense volatility within the year's best-performing market segment, as investors questioned whether massive expenditure on AI would translate into commensurate returns.

"The burden of proof has changed," stated Bret Kenwell at eToro. "Investors are no longer asking whether companies can withstand the uncertainty. They want growth and guidance strong enough to justify elevated valuations." With lofty expectations prevailing, focus now shifts decisively to earnings reports from Alphabet Inc. and Tesla Inc., starting Wednesday.

Precious Metals Rally as Investors Seek Safe Havens​

Gold and silver saw upward movement as investors engaged in dip-buying within commodity markets. Bullion advanced as much as 2% to trade above $4,080 an ounce, while silver jumped up to 5% on Tuesday.

Despite the current tech rally and metal movements, Goldman Sachs Group Inc. strategists maintain that US earnings growth should continue supporting stocks in the second half of the year. This outlook is provided even as near-term bullish positioning contends with broader macro headwinds influencing share prices.

Analysts remain closely focused on forthcoming corporate results. Nearly 20% of companies within the S&P 500 by market value are scheduled to report results this week, making Alphabet and Intel crucial for providing clarity into how AI spending is restructuring the technology industry. Yet, some strategists view recent selloffs in AI stocks not as a fundamental deterioration, but rather a healthy "reset" following an earlier parabolic advance, confirming that the long-term AI backdrop remains intact, according to Adam Turnquist at LPL Financial.