Bold claim: Asian markets open higher as US stocks hit fresh records, signaling broad risk appetite. But here’s where it gets controversial: not all gauges confirm a sustained rally, and pockets of weakness still loom.
Asia stocks started the session with gains after U.S. equities and a global benchmark reached new highs, propelled by the Federal Reserve’s third consecutive rate cut. MSCI's Asia-Pacific index nudged up about 0.5%, with Japan and Australia advancing roughly 1% in early trading. SoftBank Group Corp. shares jumped over 5% on reports it is weighing acquisitions, including data-center operator Switch Inc.
In the U.S., the S&P 500 rose 0.2 on Thursday. Despite the record highs, investors remain cautious about technology names as Broadcom Inc. shares fell in late trading due to a disappointing outlook for AI-related revenue. U.S. stock futures pointed lower on Friday, with Nasdaq-100 futures down about 0.2%.
Analysts see the momentum lasting toward year-end: with rate cuts ongoing, a new Fed chair on the horizon, and earnings trending higher, the bull market could extend into 2026. As more companies adopt AI, participation may broaden beyond the leading tech names, potentially strengthening a wider set of sectors.
The broad MSCI All Country World Index closed at a new high, helping push the global benchmark toward its strongest year since 2019.
Regionally, attention turns to Thailand after Prime Minister Anutin Charnvirakul moved to dissolve Parliament, potentially setting the stage for an early election as a coalition partner withdraws support. Ten-year yields eased slightly after a small Thursday gain, while the dollar index hovered near a two-month low.
Industrial metals gained as copper traded at fresh peaks, with gold and silver easing in Asia after prior gains. Oil rose, and Bitcoin fluctuated around a roughly $93,000 range.
The tech sector remains in focus following Oracle Corp.’s results, which rekindled concerns about AI infrastructure spending and equity valuations. While AI-fueled growth has powered much of the rally, some investors are rotating into other areas due to valuation and spending concerns. Nvidia declined about 1.6%, and the Magnificent Seven slipped about 0.6% on Thursday.
As one market observer noted, the Oracle effect may be larger than the Fed’s moves, underscoring a market concentration around AI as a core driver. This doesn’t mean AI is a bubble, but it does call for a broader perspective beyond a single theme.
Fed Chair Jerome Powell delivered a third consecutive rate cut, signaling that policy makers believe they’ve done enough to support employment while leaving rates high enough to restrain inflation. Traders still expect two rate cuts in 2026, though Fed projections suggest only one move remains possible.
Analysts describe the Fed’s stance as hawkish-but-bullish: growth could strengthen in 2026 while inflation cools, yet rate cuts are no longer automatic, which supports a constructive backdrop for equities.
Key market moves at a glance:
- Stocks: S&P 500 futures largely steady; Japan’s Topix up about 1.7%; Australia’s S&P/ASX 200 up around 1%; Euro Stoxx 50 futures up roughly 0.9%.
- Currencies: The Bloomberg Dollar Spot Index was flat; euro near $1.1744; yen around 155.64 per dollar; offshore yuan about 7.0515 per dollar.
- Cryptocurrencies: Bitcoin down about 0.3% to $92,570; Ether down about 0.3% to $3,241.
- Bonds: U.S. 10-year yield near 4.15%; Japan and Australia 10-year yields little changed.
- Commodities: WTI crude up about 0.6% to $57.92 a barrel; gold largely flat; copper hitting new records; oil broadly higher and Bitcoin fluctuating in a tight range near current levels.
Market players continue to weigh the durability of AI-driven growth against valuation concerns and the potential for policy shifts. The question for readers: do you agree that AI remains the primary driver of the market, or do you see other themes beginning to take the lead? Share your view in the comments.
