Key facts
- Asian stocks rose, led by semiconductor companies, for a second consecutive day.
- Crude oil prices surged above $92 a barrel due to escalating Middle East tensions.
- The Japanese yen fell to a 38-year low against the dollar.
- US Treasury yields reached a two-month high.
- Alphabet and Tesla are set to report earnings, influencing market sentiment.
- European shares edged lower, with technology stocks declining ahead of U.S. big tech earnings.
Asian stocks saw mixed performance on Wednesday, with gains capped by caution over upcoming Big Tech earnings reports and rising oil prices due to threats from Houthi rebels. Semiconductor stocks bounced back after recent losses, while pharmaceutical stocks in India slumped following potential U.S. tariffs on generic drugs.
MSCI's Asia Pacific equities gained 1.2%, following Tuesday's largest one-day gain in a month. South Korea's benchmark Kospi surged more than 5%, serving as a bellwether for AI investments. Taiwan Semiconductor Manufacturing Company's American depository receipts rose about 5.5% after Nikkei reported plans to increase prices by up to 10%.
A key semiconductor gauge rose 5.2%, indicating renewed demand for chipmakers after the previous week's sell-off. The Nasdaq 100 marked its best session in over three weeks. Major semiconductor stocks like Super Micro Computer Inc. saw positive gains after updating on increasing orders, while Intel Corp. shares rose on plans for further job cuts.
The Japanese yen slid past 163 against the dollar for the first time since 1986, prompting attention towards currency intervention. Crude prices rose, renewing inflation concerns and pushing US Treasury yields to their highest level in two months. Brent crude rose about 1.4% to approximately $92.43 per barrel, following US President Donald Trump's indication of no immediate prospect for talks with Iran, suggesting further restraint in global oil supply.
European shares edged lower, with the pan-European STOXX 600 index slipping 0.3%. Technology stocks on the STOXX 600 dipped 1.7%, with Soitec and Aixtron down 2.3% and 2.6%, respectively, as caution prevailed ahead of earnings from U.S. big techs. The energy sector gained 0.4%. Among individual stocks, Spanish lender Santander fell 1.3% despite reporting a 17% increase in second-quarter underlying net profit, while Finland's load-handling equipment maker Hiab jumped over 10%.
US equity-index futures slipped and Asian stocks pared gains as investors turned cautious ahead of Alphabet Inc.'s earnings, particularly its guidance on artificial intelligence spending. The moves in Asia followed a more than 5% jump in a US semiconductor gauge on Tuesday. Gold gained as much as 1.6% to about $4,142 an ounce, its highest in two weeks, as dip buyers supported prices amid escalating Middle East tensions.
Concerns about expensive valuations had previously driven a sell-off in chip stocks, pushing the Philadelphia Semiconductor Index briefly into a bear market. The gauge has since gained for two consecutive days, while a chip benchmark in Asia jumped more than 2.4% on Wednesday. Other precious metals like silver and platinum also advanced.