Asian Shares Rise on Chipmakers, Brent Tops $96: Markets Wrap

(Bloomberg) — Asian shares rose as regional chipmakers climbed on expectations they will benefit from billions of dollars flowing into the artificial intelligence buildout. Oil extended its recent rally.

MSCI’s Asia Pacific equities gauge advanced 1%, with the Kospi — a bellwether for AI investments — rising 3.6%. Samsung Electronics Co. and SK Hynix Inc. both added more than 2% as investors bet the South Korean chipmakers will be among the beneficiaries of global AI spending.

Still, caution lingered as Nasdaq 100 futures fell 0.3%, with Alphabet Inc. sliding more than 3% in extended trading after unveiling a higher-than-expected capital spending plans. Tesla Inc. shares dropped 4%, while International Business Machines Corp. edged lower after earnings. European shares were set to open lower, ahead of the European Central Bank’s policy decision later Thursday.

Oil rose as much as 2.5% to almost $96.50 a barrel, the highest level since early June, after Iran-backed Houthi militants said they targeted two Saudi Arabian tankers in the Red Sea, threatening deeper supply disruptions. Treasuries held their losses on concerns higher oil prices will stoke inflation and prompt central banks to raise interest rates.

Alphabet’s results mark the start of a critical test for the AI trade, especially for suppliers in Asia. After last week’s technology selloff, which sent a gauge of chipmakers into a bear market, earnings over the next two weeks will be scrutinized for signs that hundreds of billions of dollars invested in AI are generating commensurate returns.

“The increase in capex means a lot of those dollars will find their way to the order books in Asia,” said Josh Gilbert, Etoro APAC & Mideast lead analyst. “Investors are reading this as confirmation that the AI buildout is still accelerating and that’s good for the infrastructure underneath it.”

Alphabet now expects capital spending to reach as much as $205 billion this year, eclipsing its previous guidance and far exceeding Wall Street expectations. The company is accelerating investment in AI computing capacity to meet surging demand, executives said in a call with analysts.

Investors will turn their focus to earnings from Intel Corp. Thursday and next week’s results from Microsoft Corp., Meta Platforms Inc. and Amazon.com Inc. for guidance on capital spending.

“AI optimism remains intact, but the burden of proof has shifted decisively onto management teams,” Mark Malek, chief investment officer at Siebert Financial, wrote in a note. “Future earnings calls will increasingly focus on return on invested capital rather than AI ambitions.”

Elsewhere, yields on the Treasury two-year note held at 4.30%, having gained four basis points during the US session. The US 30-year bond yield has stayed above 5% for the longest stretch since the dawn of the financial crisis, echoing investor concerns about a growing debt pile and sticky inflation.

A Bloomberg gauge of the dollar edged 0.2% lower.

Investors are also weighing geopolitical tensions. President Donald Trump vowed to hit Iranian bridges and power plants if Tehran continued attacking vessels in the Strait of Hormuz. Iran responded with its own warning.

The renewed escalation has fueled concerns that higher energy prices could keep inflation elevated and complicate the Federal Reserve’s policy outlook. With the central bank meeting next week, money markets are pricing about a 30% chance of a rate increase and a 70% probability policymakers hold steady.

“Diplomatic efforts to end the conflict in the Middle East have effectively stalled as military strikes continue with no sign of easing,” said Ian Lyngen at BMO Capital Markets. “The rally in energy continues to weigh on the Treasury market as hostilities between the US and Iran intensify.”

Corporate Highlights:

European Earnings: Nokia Oyj’s profit beat estimates; UniCredit SpA reported higher-than-expected profit; STMicroelectronics NV forecast growing revenue in the current quarter; BNP Paribas SA reported better-than-expected revenue and profit; Nestle SA reported that organic sales rose 3.6% in the first half, exceeding analysts’ estimates for 3.51% growth; Roche Holding AG’s results showed a slower-than-expected recovery for eye blockbuster Vabysmo. European car sales jumped during June with fully electric cars underpinning the gains, offering some respite for the region’s automakers beset by mounting costs and competition from China. Hyundai Motor Co.’s second-quarter profit missed analyst estimates as global retail sales dropped. Texas Instruments Inc., the biggest maker of analog and embedded processing chips, gave a sales forecast that topped estimates but failed to excite investors, who have bid up the company’s shares this year. Southwest Airlines Co. provided an outlook for the full year that exceeded projections. Semight Instruments Co. is considering a second listing in Hong Kong, people familiar with the matter said, after shares of the Chinese maker of test instruments for semiconductors surged roughly 2,200% since their debut in April. Some of the main moves in markets:

Stocks

S&P 500 futures fell 0.2% as of 6:51 a.m. London time Nasdaq 100 futures fell 0.2% The MSCI Asia Pacific Index rose 1.1% Japan’s Topix rose 0.6% Australia’s S&P/ASX 200 rose 0.3% Hong Kong’s Hang Seng rose 1.2% The Shanghai Composite rose 0.1% Euro Stoxx 50 futures fell 0.3% Currencies

The Bloomberg Dollar Spot Index fell 0.1% The euro rose 0.2% to $1.1430 The Japanese yen was little changed at 163.09 per dollar The offshore yuan was little changed at 6.7698 per dollar The British pound was little changed at $1.3386 Cryptocurrencies

Bitcoin fell 0.4% to $65,629.48 Ether fell 0.3% to $1,920.99 Bonds

The yield on 10-year Treasuries was little changed at 4.66% Japan’s 10-year yield advanced three basis points to 2.765% Australia’s 10-year yield advanced three basis points to 5.01% Commodities

Spot gold fell 0.1% to $4,124.32 an ounce West Texas Intermediate crude rose 1.6% to $88.19 a barrel This story was produced with the assistance of Bloomberg Automation.

–With assistance from Abhishek Vishnoi and Bing Hong Lok.

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