Awaiting Nvidia's earnings report, semiconductor sector leads gains in Asia-Pacific markets; South Korean stocks close up 0.97%, oil prices fall for the third straight day, bond market strengthens
The MSCI Asia-Pacific Index rose by 0.9%, with Samsung Electronics and SK Hynix contributing most to the gains. The Nikkei 225 closed up 0.6% at 66,262.16 points, while the Korea Composite Stock Price Index closed up 0.97% at 6,808.21 points. Brent crude fell by 1.7% to around $87 per barrel, with a cumulative decline of about 8% this week. Potential easing of inflationary pressures drove strength in the bond market.
Asia-Pacific stock markets rose on Wednesday, led by the semiconductor sector, as investors are holding their breath for Nvidia's earnings report to provide guidance for the direction of the artificial intelligence rally. Meanwhile, oil prices fell for the third consecutive day, and easing geopolitical risks boosted the bond market, with overall market sentiment leaning towards cautious optimism.
On Wednesday, the MSCI Asia-Pacific Index rose 0.9%, with Samsung Electronics and SK Hynix contributing most to the gains. The Nikkei 225 index closed up 0.6% at 66,262.16, the TOPIX index closed up 0.4% at 4,111.02, and the South Korea KOSPI closed up 0.97% at 6,808.21.
Three key events will set the tone for trading this week. Nvidia's earnings report will provide a crucial signal as to whether the AI rally can regain momentum; Federal Reserve Chair Waller's first significant speech at the Jackson Hole Symposium on Friday will set the tone for the rate path, while the US PCE data released later Wednesday will test whether inflation remains sticky.
The decline in oil prices added another positive factor to the market. Iran and Oman are holding consultations on a "temporary framework" to resume shipping in the Strait of Hormuz. Brent crude fell 1.7% to about $87 per barrel, accumulating a weekly loss of around 8%. The potential alleviation of inflationary pressure has strengthened the bond market.
- The Nikkei 225 index closed up 0.6% at 66,262.16, the TOPIX index closed up 0.4% at 4,111.02, and the South Korea KOSPI closed up 0.97% at 6,808.21.
- European stocks are expected to open slightly higher, but US stock index futures fell 0.1%, reflecting overall investor caution.
- The US Dollar Index rose slightly by 0.1%.
- The yield on the 10-year US Treasury rose by 1 basis point to 4.64%.
- Japan's 10-year yield declined by 1.5 basis points to 2.875%. The 40-year Japanese government bond yield fell 2.0 basis points to 4.130%.
- Gold fell 0.4% to $4,640 per ounce.
- Brent crude fell 1.7% to about $87 per barrel, with the cumulative weekly decline expanding to about 8%.
- Bitcoin hovered near $79,000.
Semiconductors Lead Gains, Asia-Pacific Indexes Generally Rise
Previously, AI trading sentiment had been under pressure as investors questioned whether tech giants' heavy investments in artificial intelligence would achieve proportional returns. On Tuesday, Wall Street chip stocks took an early lead, with Nvidia ending a seven-day losing streak as investors positioned themselves in advance for the earnings results.

Analysts expect Nvidia's revenue for the last quarter to have nearly doubled compared to the same period last year—a scale surpassing the total annual revenue of any of its competitors. "Nvidia is currently operating at full capacity and moving in the right direction every step of the way," said Mark Malek of Siebert Financial. "We are expecting good news, but so is everyone else."
However, market sentiment is not without worries. Bloomberg Markets Live strategist Mark Cranfield pointed out that going into Nvidia's earnings season, the VIX fear index is near its low for the year, showing that beneath the calm appearance, volatility risks are lurking, and given the downside space, the likelihood of a rise in the VIX is greater. European stocks are expected to open slightly higher, but US stock index futures fell 0.1%, reflecting overall investor caution.
Oil Prices Extend Three-Day Drop, Bonds Strengthen
Brent crude oil fell for a third consecutive trading day, with cumulative weekly losses expanding to about 8%. The immediate trigger was consultations between Iran and Oman on a "temporary framework" regarding shipping in the Strait of Hormuz, with signs of easing geopolitical tensions prompting lower risk premiums for supply disruptions.

Falling oil prices have further weighed down inflation expectations, propelling the bond market to continue its rally. US Treasuries maintained Tuesday's gains. Japanese government bonds rose concurrently, with the 40-year Japanese government bond yield falling 2.0 basis points to 4.130%, while New Zealand government bonds also posted increases.

Australia moved in the opposite direction, as an inflation report strengthened market bets on rate hikes, with early gains narrowing and eventually turning into losses.
Senior analyst Kyle Rodda at Capital.com wrote in a research note: "Despite the looming event risks casting a shadow over the markets, easing geopolitical risks and the consequent drop in oil prices have been enough to counteract market concerns."
PCE Data and Jackson Hole Speech Are the Next Focus
The drop in oil prices and strength in the semiconductor sector are providing current support to the market, but two key risks remain to be digested. Later on Wednesday, the Federal Reserve's preferred inflation gauge—the Personal Consumption Expenditures (PCE) Price Index—will be released, providing new data on inflation trends, with the market set to evaluate the Fed's policy pivot potential.
On Friday, all eyes will be on the Jackson Hole Symposium. Federal Reserve Chair Waller will deliver his first major public speech since taking office, with markets keenly parsing his latest stance on the interest rate path.
In other markets, gold fell 0.4% to $4,640 per ounce, and bitcoin hovered near $79,000.

European Central Bank Executive Board Member Isabel Schnabel said that, given upside inflation risks, the ECB still needs to raise rates further, but the euro weakened slightly. The Bloomberg Dollar Index inched up by 0.1%.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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