Asian Markets Rise on Tech Gains Despite Iran Tensions and Fed Rate Concerns

Technology stocks boosted Asian markets Thursday following positive news about Nvidia's chip deal with Meta. However, ongoing U.S.-Iran tensions kept oil prices elevated while Federal Reserve meeting minutes suggested interest rate cuts remain unlikely.

Technology stocks provided a boost to Asian markets Thursday, though geopolitical tensions with Iran and uncertainty about Federal Reserve interest rate policy continued to create market volatility.

Markets across Asia posted gains despite several major exchanges being closed for Lunar New Year celebrations. The MSCI Asia-Pacific index excluding Japan climbed 0.5%, while Japan’s Nikkei index advanced 0.85%, driven primarily by technology sector performance. South Korea’s Kospi index surged approximately 3% to reach a new record high.

The rally followed strong performance by major technology companies on Wall Street, sparked by Tuesday’s announcement that Nvidia secured a multi-year agreement to supply Meta Platforms with millions of artificial intelligence chips, both current and future models.

“We needed some good news. I think there has been a general feeling of malaise in the tech sector,” commented Tony Sycamore, a market analyst at IG, referencing the significant decline that occurred earlier this month.

“Nvidia has been very much the front and centre of the rally which we saw up into the end of 2025, and potentially it’s now coming to the rescue a little bit… some badly needed good news there that can potentially set tech stocks for a better run into Nvidia’s earnings next week,” Sycamore added.

U.S. market futures showed modest gains, with Nasdaq futures up 0.05% and S&P 500 futures rising 0.03%. European EUROSTOXX 50 futures declined 0.15%.

Geopolitical concerns remained a significant factor influencing market movements. Oil prices maintained their elevated levels after Wednesday’s sharp increase, as traders factored in possible supply chain disruptions amid growing tensions between the United States and Iran.

Brent crude futures traded slightly lower at $70.31 per barrel after Wednesday’s 4.35% jump, while U.S. crude held at $65.10, retaining most of the previous session’s 4.6% increase.

“There’s been a very intensive buildup of military assets over the past 24 hours … but I think this is all part of this diplomatic cat and mouse, and I don’t think we’re going to see an imminent attack. I think this is just designed to put more pressure on Iran to come back with more reasonable objectives from these talks,” Sycamore explained.

Gold prices remained stable at $4,963.99 per ounce as investors continued seeking safe-haven assets.

The U.S. dollar strengthened Thursday following better-than-expected economic data and Federal Reserve meeting minutes from January that revealed several policymakers would consider raising rates if inflation continues at current levels.

The British pound dropped near a one-month low of $1.3488 against the dollar, while the Japanese yen remained weak near 155 per dollar, last trading at 154.80.

“From our perspective, the (Fed) minutes support our view that rate cuts are off the table for the foreseeable future,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.

“While some market participants are looking at inflation in the rear view mirror, the Fed is still signaling the safety warning that ‘objects in the mirror are closer than they appear’. Policymakers specifically noted disinflation could be on a slower path,” Ripley continued.

The euro struggled below $1.18, last trading at $1.1791, weighed down by reports that European Central Bank President Christine Lagarde intends to step down from her position ahead of schedule.

New Zealand’s dollar gained 0.11% to $0.5972, recovering partially from Wednesday’s 1.4% decline that followed the country’s central bank tempering market expectations for more aggressive policy changes at its recent meeting.