Asian Stocks to Rally on US Tech Surge, Oil Slump: Markets Wrap

South Korea's Kospi jumped 4.4% and Japan's Nikkei 225 rose nearly 3% as chip-heavy indexes tracked the S&P 500's best day since April and a near 7% surge in the Philadelphia Semiconductor Index. The MSCI Asia Pacific index climbed roughly 2%, reversing a seven-session slide in Taiwan that had pushed the island's benchmark 16% below its summer record. Taiwan's regulators cut short-selling limits to 3% of 30-day average volume from 30%, raised margin requirements to 130% from 90%, and kept a NT$500 billion stabilisation fund on standby — a policy response that underscored how fragile sentiment had become.

Brent crude slipped below $92 a barrel after a nearly 6% drop Monday, the steepest in months, after President Trump said further strikes on Iran were "highly unlikely" if nuclear talks progressed. The oil slide eased inflation breakevens and gave equities room to breathe, but Treasury yields still edged higher as the stock rally damped bond demand. Dilin Wu at Pepperstone Group said the sharp drop in oil prices gave markets "much-needed breathing room" while cautioning that "questions around AI spending and returns haven't gone away."

Nvidia shares fell 4.3% even as peers rallied, after the company disclosed a board probe into CEO Jensen Huang's admission of an affair with a woman identified in reports as a suspected Chinese spy. The board said it saw no evidence of compromised company secrets, but Nvidia's general counsel also intervened in a US government probe of suspected AI chip smuggling by Singapore-based Megaspeed International, questioning whether the Trump administration played a role in detaining an executive. Nvidia reports earnings next week.

The rebound follows a tumultuous week in which chipmakers sold off on fears that the Democratic sweep of Congress in the midterms would spur tighter AI regulation. Ulrike Hoffmann-Burchardi at UBS Chief Investment Office said the selloff represented a reset rather than a structural downturn in the AI investment cycle, but warned the rebound "does not remove the risks created by concentrated positioning and elevated expectations." Chris Larkin at E*Trade from Morgan Stanley noted investors may have been "repositioning within the AI trade rather than abandoning it altogether." Meanwhile, Anthropic launched updated Mythos and Fable models ahead of a possible Tuesday IPO roadshow seeking up to $69.3 billion, and Taiwan Semiconductor Manufacturing Co. posted a 60% jump in October sales — concrete evidence that underlying demand remains intact.

All eyes now turn to October US CPI data due Tuesday, with headline and core prices forecast to rise 0.3% and 0.2% respectively. Fed Governor Christopher Waller has already signaled support for a December rate hike and floated a possible half-point move if inflation stays stubborn. Futures pricing shows an 84% probability of a hike, up from 74% a week earlier. China's October exports rose 35.2% and imports jumped 41.6%, pushing the trade surplus above $1 trillion for a second year on AI-related shipments, linking regional supply chains to the same tech cycle now being stress-tested.