Key points
- Asian markets are largely built on recent gains, driven by optimism about AI and anticipated US rate cuts.
- Nvidia’s massive investment in OpenAI fuels tech sector surge. Gold hits record high amidst investor hedging strategies.
- Mixed messaging from the Federal Reserve regarding future rate cuts.
- Global markets await further economic data and policy announcements.
Asian share markets surged on Tuesday, driven by a wave of optimism surrounding artificial intelligence (AI) and expectations of further interest rate cuts by the US Federal Reserve. The tech sector was the primary beneficiary, with significant investment flowing into companies at the forefront of AI development.
This positive momentum follows Nvidia’s announcement of a substantial $100 billion investment in OpenAI, further solidifying the bullish sentiment. The anticipated delivery of data center equipment in the latter half of 2026 underscores the long-term commitment to AI infrastructure.
This unrelenting rise in the tech sector is attracting significant capital from momentum funds and option players, creating a self-fulfilling prophecy. However, this surge is not without its counterpoint. Investors are simultaneously hedging their equity exposure by purchasing gold, another asset exhibiting strong momentum.
Indeed, gold reached a record high of $3,759.02 per ounce, marking a near 9% increase for the month. This dual strategy reflects a cautious optimism in the current market climate.
The tech boom’s impact has been particularly pronounced in the Asian chip sectors. South Korean stocks rose by 0.5%, adding to a substantial 9% gain for the month. While Japan’s Nikkei was closed for a holiday, it had already climbed 6.5% in September.
Taiwan also experienced significant growth, with a nearly 7% rise. Conversely, Chinese blue chips declined by 0.8%, marking a slowdown after a recent rally fueled by liquidity.
The overall picture presents a mixed bag. While the broad MSCI Asia-Pacific index (excluding Japan) remained flat for the day, it still reflects a strong 5.5% monthly gain. European markets showed less dramatic gains, with futures for the EUROSTOXX 50, FTSE, and DAX indices rising modestly.
Similarly, US futures remained relatively unchanged after hitting new overnight highs. The mixed performance highlights the selective nature of the current market surge, largely concentrated in the tech and AI sectors.
