Asian Markets Climb as Global Rally Continues Despite AI Sector Turbulence

BY EMMANUEL OGBONNA

Asian stocks advanced strongly on Friday, mirroring Wall Street’s latest ascent to record territory even as renewed anxiety over a potential artificial-intelligence bubble weighed heavily on some major U.S. tech names. Investors across the region appeared willing to take on more risk ahead of several key central-bank decisions, with most major indexes posting solid gains.

Japan’s Nikkei 225 led the region’s rally, rising 1.4% to 50,836.55 as traders shrugged off Thursday’s losses. The gains came despite lingering caution surrounding next week’s Bank of Japan policy meeting, where policymakers are widely expected to raise interest rates again. Even so, robust performances in heavyweight technology stocks helped drive the index upward. SoftBank Group surged nearly 4% following an early jump of 6%, buoyed by improved sentiment toward its global tech portfolio.

Chinese markets also rebounded. Hong Kong’s Hang Seng index climbed 1.6% to 25,930.60, while the Shanghai Composite added 0.4% to 3,889.35. Investors digested signals from China’s annual Central Economic Work Conference, where senior officials emphasized reviving investment and restoring consumer confidence as top priorities for 2026. State media offered little indication of major new stimulus measures, but the commitment to strengthening domestic demand appeared enough to steady sentiment.

Momentum spread across the Asia-Pacific region. Australia’s S&P/ASX 200 rose 1.2% to 8,697.30, lifted by mining and financial stocks. South Korea’s Kospi jumped 1.3% to 4,164.91, with semiconductor and battery manufacturers advancing despite continued volatility in global tech shares. Taiwan’s Taiex gained 0.6%, and India’s BSE Sensex increased 0.5%, supported by steady foreign investment inflows.

The upbeat mood followed another milestone day on Wall Street. On Thursday, the S&P 500 added 0.2% to close at 6,901.00, nudging past the all-time high set in October. The Dow Jones Industrial Average climbed an impressive 1.3% to 48,704.01, also setting a new record. The Nasdaq composite, however, slipped 0.3% to 23,593.86 as persistent weaknesses in AI-linked companies weighed on the tech-heavy index.

The mixed performance reflected both optimism and unease. Investors have recently grown more confident after the Federal Reserve cut interest rates for the third time this year and signaled that another reduction may come in 2026. Lower borrowing costs tend to boost economic activity and drive investment demand, fueling stock market gains. But analysts warn that rate cuts alone cannot resolve deeper concerns about inflated valuations in the AI sector.

Oracle’s sharp 10.8% plunge highlighted those fears. The company at one point appeared headed for its worst sell-off since 2001, amid doubts about whether massive investments in AI infrastructure will generate the returns its executives anticipate. The skepticism has rippled through the broader industry. Nvidia—now the most visible face of the global AI boom and generating close to $20 billion in monthly revenue—fell 1.5% on Thursday, becoming the largest drag on the S&P 500 due to its market heft.

Despite the tech sector’s turbulence, other markets showed resilience. Oil prices crept higher early Friday, with U.S. benchmark crude rising 28 cents to $57.88 per barrel and Brent crude gaining 25 cents to $61.53. Currency markets were stable: the dollar slipped marginally to 155.57 Japanese yen, while the euro edged up to $1.1743.

With global equities hovering near or at record levels, investors now turn their attention to central bankers, corporate earnings, and the next wave of economic data to gauge whether the rally can continue—or whether the concerns surrounding AI valuations will deepen into something more disruptive in the weeks ahead.