Nvidia's shares rose 4.4% on Friday, the seventh straight gain, pushing its market value close to $6 trillion and powering a global tech-led rally. US indexes hit fresh records, with the S&P 500 topping 7,500 for the first time, and futures in Tokyo, Sydney and Hong Kong climbed as investors piled back into AI-exposed names. Chipmakers and megacap tech led the move, helped by solid US retail data and upbeat profit estimates from Bloomberg Intelligence. Regional economic prints and President Trump’s summit with Xi are the next likely market drivers.

The read from markets is simple. Big-cap tech and chip suppliers are the engine behind the latest upswing, and that's steering Asian markets higher after Wall Street closed at new highs. Nvidia’s 4.4% gain, its seventh straight session of rises, pushed the company’s market value toward the $6 trillion mark, and that momentum bled into futures for Japan, Australia and Hong Kong, according to one report.

Chips and megacaps in the driving seat

Investors framed chipmakers as direct beneficiaries of rising AI infrastructure spending. Taiwan Semiconductor Manufacturing Co. was singled out as a major driver, with one account recording a 6.6% jump for the company. South Korea and Taiwan, where technology-heavy indexes dominate, outperformed regional peers, each posting gains above 4.5% in one report.

Memory suppliers were named alongside TSMC as central to the rebound in semiconductor names. The rotation into technology was visible across the tape. "When it comes to stocks though, tech is in the driver’s seat right now, not the consumer," said Bret Kenwell, an equity strategist at eToro, reflecting the shift toward companies tied most closely to AI deployment.

The AI theme received an extra lift from a high-profile market debut. Cerebras Systems, a specialist in AI infrastructure, surged 68% in its IPO and trading debut, a single-source note highlighted as a notable boost to investor sentiment toward AI hardware. That kind of one-off event can amplify flows into the broader AI supply chain.

Macro backdrop and cross-market signals

US macro and corporate data provided a constructive backdrop for the rally. US retail sales rose for a third consecutive month, and estimates compiled by Bloomberg Intelligence suggested S&P 500 first-quarter profits probably expanded about 27% year-on-year.

Those figures are part of the case several sources made for a continuing strong earnings cycle, and they helped ease demand worries that had dented risk appetite earlier.

Mastheads

Still, not all market signals were unanimous. The dollar and US Treasury yields stayed firm, with the greenback near a six-week high and the US 10-year Treasury yield cited around 4.39% in one piece. That combination usually makes the picture for equity flows, yet investors appeared willing to look through firmer yields given the earnings momentum in megacaps.

Currency and policy comments also played a role. Market participants reacted to remarks from Japanese officials that intervention to curb extreme FX moves was not off the table, and the yen briefly strengthened after reports of Japanese action. Those comments sparked renewed sensitivity to FX risks in Asia, particularly for exporters and supply-chain exposed names.

Geopolitics and trade developments mattered too. One source reported a US-Taiwan trade agreement that reduced tariffs on many semiconductor exports and steered new investment toward US tech. That kind of policy news can accelerate capital spending plans inside the semiconductor ecosystem, and it was cited as supportive for chipmakers in the region.

Commodity markets gave mixed signals. Accounts diverged on oil. One report said Brent crude initially fell then settled near US$108 a barrel after a US announcement on shipping guidance through the Strait of Hormuz. Another report, however, said Brent climbed 4.4% to above US$105 a barrel after President Trump rejected Iran’s latest proposal. A separate source described oil and metals slipping after the US adopted a wait-and-see stance on Iran. Those conflicting reads underline how quickly headline events can change price direction in energy markets.

Market breadth under the surface suggested the rally was concentrated. MSCI’s broad Asia-Pacific ex-Japan index, and related regional gauges, moved nearer to or into record territory in some accounts. One report cited the MSCI Asia Pacific index at 761.53. But the gains were not uniform, with technology-heavy markets taking the lead while other sectors lagged.

The picture on the ground is one of selective risk-taking. Investors have rotated back into AI-linked hardware and the big tech names that underpin cloud infrastructure, while still monitoring currency, yield and geopolitical risks that can interrupt flows at short notice.

For active portfolio managers, the current setup is a classic trade-off. The numbers from US corporates and retail data support higher equity valuations for now, yet a firm dollar and elevated yields temper the breadth of the rally. That helps explain why chips and megacaps, the clearest beneficiaries of the AI story, have worked better than the market at large.

Regional markets will also be sensitive to fresh economic prints next week, and to any further policy moves that affect currencies and capital flows. Traders are watching how local data and external developments interact with the AI narrative that's currently in charge of risk appetite.

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Traders head into a packed week: Japan producer prices, GDP prints for Malaysia and Hong Kong, India’s unemployment figures and the Trump-Xi summit. Any surprise from those releases could recalibrate how far the AI-driven rally carries Asian benchmarks.

This article was created with AI assistance.