• Asian markets are extending their rally on Wednesday, with technology and semiconductor stocks leading gains. South Korea’s KOSPI is up around 1.2%, while Taiwan is also trading higher as renewed demand for AI applications continues to support the technology sector.
• The Nasdaq remains in focus after reaching a fresh intraday record high on Tuesday. Strong performance from major technology stocks and continued optimism around AI adoption are keeping risk appetite supported, while Nasdaq futures are holding near record levels.
• Oil prices are easing as signs of improving Middle Eastern supply reduce some concerns over global energy shortages. Brent crude is trading below $100 per barrel after Saudi Arabia restarted operations on its East-West Pipeline, while increased Iraqi exports are also helping improve supply expectations.
• U.S. markets are entering the session with a mixed tone. The Nasdaq continues to outperform as investors remain focused on AI-related stocks, while the Dow is facing greater pressure from weakness in major financial companies. Treasury yields remain elevated, with the 10-year yield still close to the 5% level.
• The upcoming U.S.-China summit is another key market catalyst. Investors are watching for progress on trade relations and potential cooperation on artificial intelligence, with Chinese President Xi Jinping expected to meet U.S. President Donald Trump in Washington.
• European markets are also set for a relatively positive opening, with DAX futures and Euro Stoxx 50 futures both trading higher. However, higher energy costs and expectations for tighter monetary policy remain important risks for European equities.
• The Nikkei cash market was closed for a Japanese holiday, but Nikkei futures are trading significantly higher. The Japanese yen remains under pressure near 157.60 per dollar, keeping markets alert to the possibility of further intervention from Japanese authorities if the yen approaches the 160 level.

KEY MARKET THEME: AI + OIL + U.S.-CHINA RELATIONS

The combination of strong AI demand and easing oil prices is providing a more supportive backdrop for global equities. The Nasdaq remains the main beneficiary of the technology rally, while semiconductor stocks are driving gains across Asian markets. At the same time, falling oil prices are reducing some of the inflation pressure created by the recent Middle East disruptions. Investors will also closely monitor the upcoming Trump-Xi meeting, while elevated Treasury yields and expectations for further Fed tightening remain key risks for global markets.