Asian Stocks Advance on AI-Driven Chip Rally; Fed, Oil Concerns Cap Gains

Asian stocks started the week on a positive note, propelled by a sharp rally in chipmakers as investor enthusiasm for artificial intelligence reignited. The gains followed a mixed session on Wall Street Friday after stronger-than-expected U.S. jobs data fueled expectations for a more hawkish Federal Reserve.

Trading was relatively thin as U.S. markets were closed for the Labor Day holiday. In Asian trading, U.S. stock-index futures were little changed, according to market data.

Chipmakers Surge on AI Hopes

Technology shares led the advance across the region, with the MSCI Asia Pacific index climbing 1.1%. The rally was most pronounced in markets with heavy exposure to the semiconductor industry.

• South Korea’s KOSPI index jumped 3.4%, with major gains from SK Hynix Inc (+6.1%) and Samsung Electronics Co Ltd (+4.0%).
• Japan’s Nikkei 225 rose 1.9%, with component makers like Kioxia and Murata Manufacturing seeing significant advances.
• Taiwan Semiconductor Manufacturing Co (TSMC), a key industry bellwether, gained 1.5%.

The surge was linked to renewed optimism around demand for AI infrastructure, reportedly following OpenAI's unveiling of a new model, which lifted the entire supply chain.

Economic Headwinds Remain in Focus

Ad

Despite the tech-led rally, broader market sentiment remains cautious due to macroeconomic risks. A U.S. jobs report on Friday showing 162,000 payrolls were added in August—beating expectations—has strengthened the case for the Federal Reserve to maintain its tight monetary policy. Investors are now closely watching the upcoming U.S. consumer price report, which could be a decisive factor for the Fed's September rate decision.

Adding to inflation concerns, oil prices continued to climb amid geopolitical tensions. Brent crude rose to $96.45 a barrel, while West Texas Intermediate crude gained to $91.85. The source of the tension was cited as a U.S. strike on Iranian oil tankers over the weekend, which raised the risk of disruption to energy flows in the Strait of Hormuz.

Mixed Performance in China and India

Chinese markets showed a divided performance. The blue-chip CSI 300 index edged up 0.2%, but Hong Kong’s Hang Seng index fell 1.2%, weighed down by losses in major technology stocks like Baidu and Xiaomi. The moves came as Beijing announced a 360 billion yuan recapitalization plan for state-owned banks and insurers to support lending and bolster the financial system.

Elsewhere in the region, India’s Nifty 50 gained 0.1%, while markets in Australia, Thailand, and Malaysia also posted modest gains. Singapore and New Zealand finished lower.