BY COMFORT OGBONNA
Asian stock markets mostly advanced on Thursday, tracking a strong rally on Wall Street that was powered by gains in technology shares, particularly chipmaker Nvidia. Investor confidence in artificial intelligence continued to buoy U.S. equities, though geopolitical tensions in the Middle East kept traders cautious.
U.S. stock futures edged slightly lower in early trading, while oil prices moved higher following media reports suggesting the possibility of escalating conflict with Iran. The prospect of instability in the region added a layer of uncertainty to otherwise upbeat market momentum.
U.S. President Donald Trump is reportedly weighing potential military action against Iran, as Washington increases its military presence in the region while maintaining indirect negotiations with Tehran over its nuclear program. The situation has fueled concerns among investors that any confrontation could spiral into a broader regional conflict, potentially disrupting global energy supplies and trade routes.
Across Asia, trading activity was mixed as several markets in Greater China remained closed for Lunar New Year holidays, while others resumed operations. In Japan, the Nikkei 225 rose 0.6% to 57,467.83, reflecting renewed optimism among investors. South Korea’s Kospi surged 3.1% to 5,677.25 as markets reopened after earlier holidays. Technology heavyweight Samsung Electronics climbed 4.9%, providing strong support to the broader index.
Australia’s S&P/ASX 200 advanced 0.9% to 9,086.20, while Southeast Asian markets posted solid gains, with Thailand’s SET Index rising 1.7%. In contrast, India’s Sensex reversed early gains to close 0.8% lower, reflecting some profit-taking after recent advances.
European markets also showed strength during Wednesday’s session. London’s FTSE 100 climbed 1.2% after fresh data on U.K. inflation strengthened expectations that the Bank of England could begin cutting interest rates in the near future.
On Wall Street, the S&P 500 rose 0.6%, while the Dow Jones Industrial Average gained 0.3%. The tech-heavy Nasdaq Composite outperformed with a 0.8% increase.
Nvidia was a central driver of the rally, climbing 1.6% after Meta Platforms unveiled a long-term partnership to purchase millions of Nvidia chips and related hardware for its artificial intelligence data centers. Nvidia CEO Jensen Huang emphasized the scale of AI deployment at Meta, underscoring the massive computing demand expected in coming years. Given Nvidia’s status as the most valuable company on Wall Street, its gains had an outsized impact on the broader market.
The strong performance of AI-related stocks highlights the powerful upside potential investors see in artificial intelligence. However, the sector has also been a source of volatility. In recent weeks, concerns about excessive valuations and the disruptive impact of AI technologies have triggered sharp swings in share prices. Meta’s stock, for instance, fell as much as 1.7% earlier in the session before rebounding to close 0.6% higher.
Investors remain wary that rapid AI development could disrupt industries ranging from software and legal services to logistics and transportation. Analysts describe the recent market behavior as “shoot first, ask questions later,” as traders aggressively exit stocks perceived to be vulnerable to technological displacement.
Corporate earnings continued to support the broader market. Several upbeat profit reports extended what has been a generally strong reporting season among major U.S. companies. Outside of tech, Moderna jumped 6.1% after announcing that regulators at the Food and Drug Administration will review its flu vaccine candidate, reversing an earlier refusal to consider it.
Economic data also surprised to the upside. Reports showed industrial production improved last month, while orders for computers, fabricated metal products, and other durable goods—excluding transportation equipment—rose more than economists had anticipated. Another report indicated that homebuilders broke ground on more new homes in December than forecast, suggesting resilience in the housing sector despite elevated borrowing costs.
Such robust economic indicators could influence the policy path of the Federal Reserve. The central bank has paused its interest rate cuts, and minutes from its latest meeting revealed that many officials want clearer evidence that inflation is declining before approving further reductions this year. While lower interest rates can stimulate economic growth and lift asset prices, they also carry the risk of reigniting inflationary pressures.
In commodities markets early Thursday, U.S. benchmark crude oil added 20 cents to $65.25 per barrel, while Brent crude rose 15 cents to $70.50 per barrel. The U.S. dollar strengthened to 155.09 Japanese yen from 154.83 yen, while the euro edged up to $1.1796 from $1.1782. Gold prices climbed 0.5%, silver gained 1.5%, and bitcoin slipped 1.4% to trade around $67,000.
Overall, global markets are balancing optimism over artificial intelligence-driven growth and solid corporate earnings against geopolitical risks and lingering questions about the future direction of interest rates.
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