AI Excitement Drives Asian Markets Higher as Wall Street Rebounds

Asian stock markets climbed Wednesday morning following a strong Wall Street rally fueled by renewed optimism about artificial intelligence technology. Japan's benchmark index reached a record high despite trade tensions with China, while major AI partnerships boosted investor confidence.

TOKYO — Markets across Asia posted gains during Wednesday morning sessions, with Japan’s primary stock index achieving a new record, following a robust overnight performance on Wall Street driven by renewed enthusiasm for artificial intelligence developments.

Japan’s main market index climbed 1.3% to reach 58,081.62, even as tensions persisted from China’s recent decision to impose export restrictions on 40 Japanese firms and institutions, citing concerns about Japan’s military expansion.

Market responses varied among individual companies, with some like Subaru Corp. and Mitsubishi Materials Corp. seeing price increases, while others including Eneos Corp. and Sumitomo Heavy Industries experienced declines.

Market experts noted that a weakening yen helped lift shares of export-focused companies such as Honda Motor Co. and Panasonic Corp. The dollar fell slightly to 155.78 Japanese yen from 155.83 yen, well below the near-160 yen levels seen months earlier. The euro strengthened to $1.1784 from $1.1779.

Other regional markets also posted strong performances: Australia’s S&P/ASX 200 jumped 1.1% to 9,122.50, South Korea’s Kospi surged 1.7% to 6,069.36, Hong Kong’s Hang Seng rose 0.3% to 26,668.83, and the Shanghai Composite added 0.7% to 4,147.68.

Market participants are keeping close tabs on President Donald Trump’s State of the Union address, scheduled during Asian trading hours. Trump aims to reassure increasingly skeptical Americans about the economy’s strength and his administration’s support for domestic employment and manufacturing.

Tuesday’s U.S. trading session saw the S&P 500 advance 0.8%, recovering nearly three-quarters of Monday’s steep decline. The Dow Jones Industrial Average gained 370 points or 0.8%, while the Nasdaq composite increased 1%.

Advanced Micro Devices led market gains with an 8.8% rally after revealing a multi-year agreement to provide chips to Meta Platforms for its AI initiatives. The deal also grants Meta rights to purchase up to 160 million AMD shares at 1 cent each, contingent partly on chip purchase volumes.

This development highlighted the continued excitement surrounding billions in AI investments, marking a sharp reversal from Monday’s concerns about AI’s potential negative impacts that rattled Wall Street. IBM recovered with a 2.7% gain, partially offsetting its 13.1% Monday decline – its worst performance since 2000.

Tuesday brought new business-focused tools from Anthropic for its Claude AI assistant, spanning human resources, engineering, and investment banking applications.

According to Wedbush analyst Dan Ives, the announcement suggested that concerns about AI completely replacing existing software may be excessive.

“While these use cases are impressive, the reality is that these new AI tools will not rip and replace existing software ecosystems and data environments with these AI tools only as useful as the data it can reach,” he said.

Major U.S. corporations continued delivering fourth-quarter 2025 earnings that exceeded analyst projections. Keysight Technologies posted the S&P 500’s largest gain at 23.1%, while Home Depot climbed 2% after reporting stronger-than-expected profits and revenue.

Final tallies showed the S&P 500 rising 52.32 points to 6,890.07, the Dow Jones Industrial Average adding 370.44 to 49,174.50, and the Nasdaq composite gaining 236.41 to 22,863.68.

Bond markets remained relatively stable following a report showing U.S. consumer confidence improved beyond economists’ forecasts. The 10-year Treasury yield held steady at 4.03%, matching late Monday levels.

Energy markets saw benchmark U.S. crude oil rise 45 cents to $66.08 per barrel, while Brent crude, the global standard, increased 47 cents to $71.24 per barrel.