AI chip giants spark Asian market rally after strong earnings

SINGAPORE, June 25 — Asian equities surged today after strong earnings and forecasts from chip giants Micron and Qualcomm helped alleviate some concerns over the red-hot AI rally that has pushed global stocks to record highs.

Tech-heavy markets in Japan and South Korea rose sharply after Micron said its customers had committed US$22 billion for its memory chips, while Qualcomm anticipates US$15 billion (RM90 billion) in sales from its data centre business by 2029.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 1.3 per cent higher in early trading. Japan’s Nikkei rose over 2 per cent while South Korea’s KOSPI, the world’s best-performing stock market in 2026, gained 5.5 per cent.

Futures for S&P 500 rose 0.5 per cent while Nasdaq futures jumped 1.8 per cent.

“Tech stocks received a massively needed shot in the arm after the bell when Micron delivered its earnings report,” said Tony Sycamore, market analyst at IG, noting that data was suggesting broader cooling in positioning that could challenge tech’s momentum in the near term.

Investor concern that valuations for AI-related companies have become stretched following years of gains has weighed on markets in recent days, leading to volatile sessions.

Analysts though remain sceptical of a long-sustained rally in AI stocks as those valuation worries linger.

“It’s a positive from Micron,” said Nick Twidale, chief market strategist at ATFX Global in Sydney, who expects a strong move higher on the back of the earnings.

“But I’m not sure how long the euphoria will last across the rest of the sector… I think valuation concerns will continue to weigh on sentiment moving forward,” he said.

Tankers exit Strait of Hormuz

Oil prices extended their decline as stranded tankers exited the Strait of Hormuz following an initial accord to end the US-Israeli war with Iran, easing supply concerns. O/R

Brent crude futures dipped 0.5 per cent to US$73.34 a barrel, inching closer to pre-war levels. US West Texas Intermediate fell 0.38 per cent to US$70.07 a barrel.

Easing oil prices may help reduce some inflation pressure but elevated prices are likely to keep the US Federal Reserve under pressure to raise interest rates with investors pricing in at least one rate increase this year.

Today’s PCE inflation report is expected to show core prices rose 0.3 per cent in May, putting the annual rate at 3.4 per cent. Headline inflation is forecast at 0.5 per cent for the month and 4.1 per cent year-over-year.

Rising expectations of a rate hike have boosted the dollar, putting the Japanese yen near its lowest in 40 years and on the brink of more intervention from Tokyo.

The yen was last at 161.73 per US dollar, not far from the two-year low it hit last week. A break below 161.96 would take yen to its lowest level since 1986.

The dollar index, which measures the US unit against a basket of currencies, was at 101.6 after reaching 101.80 in the previous session, its highest since May 12, 2025.

The strengthening dollar has weighed on gold, which slid below US$4,000 an ounce for the first time in 2026. Spot gold last fetched US$3,990 per ounce, hovering near its lowest since November. — Reuters