Sydney — Asian share markets looked to build on recent hefty gains on Tuesday as optimism around all things AI sucked money into the tech sector, while wagers on several more US interest rate cuts kept gold on a hot streak.
Wall Street had been led to another record as Nvidia announced it would invest up to $100bn in OpenAI, with the first data centre gear to be delivered in the second half of 2026.
“With US tech/AI currently in red-hot form, we'd need to see something left field to derail the upbeat flows that are the driving force of Oracle, Apple, Nvidia, Tesla and some of the US hardware plays,” said Chris Weston, head of research at broker Pepperstone.
The seemingly inexorable rise in tech was attracting money from momentum funds and option players, becoming almost self fulfilling. Weston also noted investors were hedging their exposure to equities by buying gold, another asset with strong momentum right now.
The metal hit a fresh record at $3,755.47/oz, to nearly 9% higher for the month so far.
The rush into tech has been a boon for chip sectors in many Asian markets, with South Korean stocks up 0.2%, having surged almost 9% this month.
Japan’s Nikkei was closed for a holiday but has climbed 6.5% so far in September, while Taiwan has risen almost 7%. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3%, to be 5.5% higher on the month.
Chinese blue chips nudged up 0.1%.
European equity markets have tended to lag in the tech rush and Eurostoxx 50 futures were up 0.1% on Tuesday. FTSE futures also added 0.1%, while DAX futures edged up 0.2%.
S&P 500 futures and Nasdaq futures were both little changed having hit new peaks overnight.
Mixed messaging from US Fed
Equities globally have been underpinned by expectations of a series of further rate cuts from the Federal Reserve following last week’s easing.
Futures imply about a 90% chance of a further quarter-point rate cut in October, and a 75% probability of an easing in December as well.
Markets remained doggedly dovish despite mixed messaging from the Fed itself. Speaking on Monday, new Fed governor Stephen Miran, hand picked by President Donald trump, argued for sharply lower rates, but three of his colleagues said the central bank needed to remain cautious about inflation.
Fed chair Jerome Powell will get his own chance to weigh in later on Tuesday when he speaks on the economic outlook and takes questions on policy.
A host of PMI surveys on manufacturing out on Tuesday will provide an update on how industry globally is faring in the face of US tariffs.
Treasuries have also been underpinned by the outlook for lower short-term rates, though the market is bracing for a flood of government and corporate debt to absorb this week.
The Treasury sale kicks off with $69bn in two-year notes later Tuesday, followed by $70bn in five-year notes and $44bn in seven-year paper.
The clock is also ticking on a possible US government shutdown ahead of a September 30 funding deadline.
In currency markets, the dollar continued its recent see saw pattern, easing overnight after three sessions of gains.
The euro was steady at $1.1809, after bouncing from a $1.1726 low on Monday, while the dollar had faded to ¥147.68 from a top of about ¥148.37.
Sweden’s Krona held at 9.3497/$ as markets waited to see if the country’s central bank would cut rates at a meeting later in the day. Futures imply about a one-in-three chance of an easing.
In commodity markets, oil prices were restrained as concerns of an oversupply outweighed geopolitical tensions in Russia and the Middle East.
Brent eased 0.2 to $66.46 a barrel, while US crude dipped 0.1% to $62.21 per barrel.
Reuters
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