Technology stocks are driving a worldwide market rally, with Asian exchanges posting dramatic gains as they catch up to the global semiconductor and AI boom that has been sweeping financial markets this week.
Japan’s Nikkei index soared almost 6% as trading resumed following the Golden Week holiday, powered by SoftBank’s technology-focused shares which jumped nearly 20%. This follows similar tech-driven rallies across Asia as markets return from holiday breaks.
The surge in Tokyo brings Japan’s year-to-date market gains to an impressive 25%, though that still trails South Korea’s remarkable 75% increase this year. Both Asian markets are significantly outperforming U.S. indexes, with the S&P 500 up 8% and the Nasdaq gaining 11% so far in 2024, highlighting how the global race for chip technology and AI equipment is particularly intense overseas.
Meanwhile, U.S. markets continued their own upward climb to fresh record highs, with the S&P 500 adding another 1% on Wednesday. The gains came as oil prices tumbled nearly 8% amid growing optimism about potential peace negotiations involving Iran.
Energy prices continued their decline into Thursday’s trading session, with Brent crude hovering around $99 per barrel and West Texas Intermediate at approximately $93. The drop in oil costs also pushed bond yields lower across major markets.
European markets joined the rally, with the STOXX 600 index climbing 2% on Wednesday, bringing it within 2% of levels seen before the current Middle East conflict began. However, European trading showed some hesitation in early Thursday sessions.
The diplomatic developments center on Iran’s current review of the latest U.S. proposal to end hostilities, which reportedly would trigger a month-long period of intensive negotiations aimed at reaching a comprehensive agreement. Despite the renewed hopes for peace, military actions in the Gulf region and Lebanon have continued intermittently.
On the economic front, upcoming Friday’s U.S. employment report is being closely watched, with early indicators suggesting the labor market has remained resilient despite two months of energy market volatility. Private sector job data from ADP for April exceeded analyst forecasts.
Other significant events on investors’ radar include the scheduled Trump-Xi summit planned for next week, while Thursday brings local elections in the United Kingdom that could significantly impact Prime Minister Keir Starmer’s leadership position within the ruling Labour Party.
The artificial intelligence revolution is clearly extending far beyond Wall Street, with semiconductor and technology equipment manufacturers across Asia experiencing substantial gains that are driving benchmark indexes to new heights throughout the region.
Key economic data releases Thursday include U.S. weekly unemployment claims at 8:30 a.m. and March consumer credit figures at 3 p.m. Federal Reserve officials John Williams from New York, Neel Kashkari from Minneapolis, and Beth Hammack from Cleveland are all scheduled to make public remarks.
Corporate earnings reports are expected from major companies including Airbnb, CoreWeave, and McDonald’s.
