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Technology stocks are leading global markets higher after renewed optimism around AI demand pushed the Nasdaq to a record close. The Nasdaq Composite surged 2.26% on Monday, while the S&P 500 gained 1.49% and the Dow rose 0.71%. Semiconductor stocks were at the centre of the move: AMD jumped about 10%, reaching a $1 trillion market value for the first time, while Intel rose 12.2%, Arm gained 17% and the Philadelphia semiconductor index advanced 4.3%. Meta climbed 11.4% as strong early demand for its Muse AI assistant revived confidence in AI-related spending after last week’s technology selloff.
The rally has carried into Asia, although U.S. futures suggest a more measured start today. Nasdaq-100 futures were up around 0.1%, while the MSCI Asia-Pacific index excluding Japan gained 0.75% to a two-week high. South Korea’s KOSPI initially climbed around 2% before paring some gains, while Taiwan’s market reached a record high. Lower oil prices and the retreat in U.S. Treasury yields have helped remove two of the pressures that weighed heavily on technology valuations last week.
Oil remains one of the most important cross-asset drivers. Brent rebounded 1.7% to $102.06 per barrel today after falling for four consecutive sessions, but the move appears partly driven by short covering. Markets are watching for possible U.S.-Iran discussions during the UN General Assembly after President Donald Trump said he was open to meeting Iranian President Masoud Pezeshkian. At the same time, Saudi crude shipments through the Strait of Hormuz reached a six-month high, easing supply concerns.
The improvement in equities is therefore running against a still-hawkish interest-rate backdrop. The Federal Reserve raised rates by 25 basis points last week, its first increase in three years, and signalled that further tightening may be required. The U.S. dollar index is around 100.4, close to a seven-week high, while markets now assign roughly a 56% probability of another Fed increase in October, up from 43.5% a week ago. The stronger dollar and prospect of higher-for-longer rates remain important constraints on risk assets despite the current technology rally.
Gold is showing that pressure directly. Spot gold fell 0.6% to around $4,319 per ounce today as the stronger dollar and expectations for further Fed tightening reduced demand for the non-yielding metal. With relatively little major U.S. economic data scheduled this week, Fed communication and oil are likely to carry greater weight: another sustained increase in crude could reinforce inflation expectations and strengthen the case for additional tightening, creating further pressure on gold and rate-sensitive assets.
The next major event risk extends beyond monetary policy. Markets are preparing for the Trump-Xi meeting later this week, with investors focused on a possible extension of the U.S.-China trade truce and potential discussions around AI. Given the current concentration of market leadership in semiconductors and AI-linked stocks, any development affecting technology restrictions, trade conditions or AI cooperation could become an important catalyst for the Nasdaq and Asian technology markets.
Risk Disclaimer: This material is provided for informational purposes only and does not constitute a recommendation or investment advice. Trading financial instruments on margin involves substantial risk and may not be appropriate for all investors.
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