Asian stocks advance on tech rebound ahead of Fed
Federal Reserve’s rate decision and US mega-cap earnings.
Japanese and Australian shares rose. Most other major markets in the region are closed for Lunar New Year holidays. US equity futures declined after the S&P 500 rose 0.9% and Nasdaq 100 advanced 1.6% on Tuesday, as Nvidia Corp. rallied 8.9% following the largest one-day value loss in history. The dollar and oil gained after President Donald Trump talked about across-the-board tariffs.
The share gains come after a rough start to the week on concern that a cheap artificial intelligence-model from Chinese startup DeepSeek might make valuations of the technology that has powered the bull market tough to justify. However, a re-evaluation saw the likes of Steve Cohen saying it may be good for the industry. Investors in the region will now be looking toward the Fed decision on rates and the start of the Big Tech reporting season on Wednesday — a key test for AI bulls.
“Was it a bit unnerving? Yes, for some. Should you panic? Not at all,” said Kenny Polcari at SlateStone Wealth. “If you talk to anyone that bought stock yesterday, they loved the opportunity to buy some of these names at a deep discount. In the end, no matter how this plays out, competition is good.”
In Australia, the core inflation eased by more than expected in the final three months of 2024. The Australian dollar dropped and the policy-sensitive three-year yield fell 5 basis points on bets that the Reserve Bank may embark on a monetary easing cycle soon.
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