Asian stock markets rallied across the board on Wednesday, fueled by strong earnings from tech companies that reignited enthusiasm for AI trading, while US stock index futures also climbed. Concurrently, ongoing tensions in the Middle East pushed oil prices higher for a sixth consecutive session, as investors turned their attention to the upcoming US inflation data due later in the day.

The Korea Composite Stock Price Index (KOSPI) surged 5%, with Samsung Electronics and SK Hynix both advancing over 8%, serving as the primary drivers of this rebound. AI cloud infrastructure firm CoreWeave jumped 16% in after-hours trading, and Super Micro Computer rose 7.6% post-market, both delivering better-than-expected results, which lifted the Nasdaq 100 futures by 0.3%. The MSCI Asia Pacific stock index climbed 0.7%, the Asia tech sector sub-index gained 2.6%, and the regional semiconductor benchmark index rose 1.8%.

In the oil market, Brent crude advanced 0.6% to $89.45 per barrel, extending its six-day winning streak—the longest stretch since April this year. Stalled US-Iran negotiations are the main catalyst, with a geopolitical risk premium continuing to support crude prices.

Strategists at OCBC, including Moh Siong Sim, wrote in a note: "Today's inflation data could be crucial for September FOMC pricing, while the oscillating range of the dollar continues to favor carry trades."

Market movers at a glance

The Korea Composite Stock Price Index (KOSPI) expanded gains to 5%, with Samsung Electronics and SK Hynix both surging more than 8%.

S&P 500 futures rose 0.1%. Nasdaq 100 futures increased 0.3%.

The USD/JPY pair hovered around 159.40, nearing the key 160 level.

The 10-year US Treasury yield held steady at around 4.69%.

Gold rebounded from Tuesday's decline, rising 0.7% to approximately $4,400 per ounce.

Brent crude oil gained 0.6% to $89.45 per barrel, continuing its six-day rally.

Bitcoin edged up 0.1% to $63,772.65.

AI earnings boost, Korean chip stocks lead Asian markets

The technology earnings season has become a central catalyst for this rebound. CoreWeave's strong revenue growth indicates sustained robust demand for AI infrastructure, and Super Micro's revenue guidance also exceeded market expectations. These two developments collectively boosted investor confidence in AI tech trades.

The KOSPI index, a key barometer for AI investment, saw Samsung Electronics and SK Hynix receive continued market attention for their shareholder return policies. Additionally, media reports regarding investment plans from Singapore's Temasek Holdings lifted overall market sentiment.

Christina Woon, a portfolio manager at Eastspring Investments, stated in a Bloomberg TV interview: "The earnings season so far provides a degree of comfort, especially regarding tech trades."

Kinger Lau, chief China equity strategist at Goldman Sachs, also noted in a Bloomberg TV interview: "Earnings will be key. The internet sector's outperformance in July was mainly driven by valuation repair, but it's now time to refocus on earnings themselves."

Stalled Middle East talks, oil prices notch six-day rally

The crude oil market maintained its strength, with the core logic being the lack of progress in US-Iran negotiations over the Strait of Hormuz. Although Pakistan's defense minister indicated the two countries were "close to some agreement," the positions of both the US and Iran appear to have hardened, casting a shadow over the talks' prospects.

Tim Waterer, chief market analyst at KCM Trade, wrote in a research note: "With time passing and issues unresolved, market anxiety is steadily rising. Traders are increasingly worried that the conditions put forward by both sides will only add complexity, thereby reducing the likelihood of a viable agreement in the near term."

Last week, news suggested a breakthrough in negotiations was imminent, prompting risk assets to rise. The subsequent waning of that optimism, combined with rising oil prices and broader uncertainty, has kept investors generally cautious ahead of the inflation data release.

US CPI becomes key variable, Fed's path faces renewed test

The US July CPI data, due later on Wednesday, has become the most closely watched macroeconomic event for current markets. According to a Bloomberg survey of economists, the July CPI is expected to rise 0.1% month-over-month, following a 0.4% decline in the prior month. Bloomberg noted that energy price pressures, which intensified in the initial months following the Iran conflict, are expected to gradually ease as the situation evolves.

If the inflation data comes in lower than expected, it could help ease concerns about the Federal Reserve's policy direction—especially after three Federal Open Market Committee members voted in favor of a rate hike at the July meeting.

Strategists at OCBC, including Moh Siong Sim, wrote in a note: "Today's inflation data could be crucial for September FOMC pricing, while the oscillating range of the dollar continues to favor carry trades."

Additionally, the USD/JPY pair hovered around 159.40, nearing the key 160 level. The market is closely monitoring whether Japanese authorities will intervene in the foreign exchange market again. The dollar weakened against most other G10 currencies, the 10-year US Treasury yield remained relatively stable at 4.69%, and gold rebounded from Tuesday's losses, rising 0.7% to approximately $4,400 per ounce.