05/08/2026
Asian equity markets rebounded to end a two-day losing streak, tracking Wall Street’s gains as investors flocked back to AI-themed trades and drove a rally in semiconductor stocks.
The MSCI Asia Pacific Index rose 1.9%, notching its first gain in three days and hitting its highest level since mid-July during intraday trading. Regional markets delivered strong performances, with South Korea’s KOSPI Composite Index surging 4.2% and Australia’s stock market climbing to a record high.
Chip stocks remained in the market spotlight after the U.S. Semiconductor Index posted its largest four-day advance since 2020. Seoul-listed chip giants Samsung Electronics and SK Hynix both gained more than 2%, while Taiwan Semiconductor Manufacturing Company (TSMC) saw its share price rise 3.5%.
U.S. stock markets showed mixed momentum. After the S&P 500 closed at a record high on Tuesday, its futures edged slightly higher during early Asian trading. Nevertheless, caution persisted across the market. SpaceX tumbled 7.5% in after-hours trading following projections of higher-than-expected AI business spending, while AMD plunged 9% on weak earnings outlooks, highlighting clear divergence within the tech sector.
Commodities, foreign exchange and bond markets saw synchronized adjustments. Brent crude oil recouped some losses amid optimism over a potential interim deal between the U.S. and Iran. Improved prospects for the reopening of the Strait of Hormuz, a critical global energy shipping lane, pushed Brent crude to $79.75 per barrel.
U.S. Treasuries extended gains from the previous session as traders scaled back expectations for Federal Reserve interest rate hikes. The benchmark 10-year U.S. Treasury yield edged up slightly to 4.62% in early Wednesday trading, while the Bloomberg Dollar Spot Index remained largely flat. Gold prices advanced to around $4,090 per ounce, as falling oil prices eased inflation concerns and tempered expectations for prolonged high interest rates. Meanwhile, the yen’s rally driven by joint U.S.-Japan intervention stalled.
On the geopolitical front, the Middle East situation showed signs of easing. Qatar has drafted a proposal, with both U.S. and Iranian officials expressing optimism over the reopening of the vital oil shipping waterway. The interim deal is expected to restore commercial shipping through the strait, stabilize global energy supply chains and mitigate the risk of renewed conflict in the Middle East. However, market participants note that the tentative agreement will likely fail to fully end hostilities or resolve U.S. concerns over Iran’s nuclear program.
Investors are currently closely monitoring two key market trends: whether the resumption of shipping in the critical waterway can sustain lower oil prices, ease inflationary pressures and further dampen Fed rate hike expectations; and whether AI-focused trades can regain momentum after a month of volatile swings that erased gains for numerous hedge funds.
Elsewhere in the market, lower oil prices eased expectations of multiple Fed rate hikes within the next year, buoying U.S. Treasuries during New York trading hours. Asian hedge funds suffered heavy losses in July. A major prime brokerage report from Goldman Sachs indicated that heavy tech stock sell-offs made the month one of the worst on record for long-short equity funds across the region.
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