Asian shares and US equity futures opened higher on Monday after a week of steep AI-driven losses in tech-heavy Asian markets. Strong US jobs data lifted bets on a December Fed rate hike and pushed the dollar higher.
Asian markets and US equity futures started Monday higher, following a week in which tech-heavy Asian markets suffered some of their steepest falls in years over AI.
Asia rebounds after the AI rout
MSCI's broadest index of Asia-Pacific shares outside Japan rose 2% after sliding 4.6% last week. Japan's Nikkei index added 3.5%, while Korean shares climbed 1.8%.
Taiwan's benchmark rose more than 6% after its steepest weekly drop in two decades. Fears about AI profitability and infrastructure demand sparked that rout, which followed Democratic wins in the US midterm elections.
S&P 500 e-minis were 0.6% higher on Monday. Wall Street equities had rallied on Friday to end a chaotic week of heavy AI-related selling.
Fed hike bets build
A US jobs report on Friday showed employers added 165,000 jobs last month, more than twice economists' expectations. That strengthened the case for the Federal Reserve to raise interest rates in December.
According to the CME FedWatch Tool, market expectations of a Fed increase of at least 25 basis points at its December meeting moved up to nearly 80%. Markets will now watch a US CPI reading due on Tuesday for further clues on inflationary pressures.
The dollar notched its biggest single-day gain in five months. The dollar index last traded at 102.2.
Earnings and Nvidia probe test the rebound
Earnings from CoreWeave, Applied Materials and Cisco Systems are set to test the profitability of AI ambitions this week, given the massive costs of the build-out.
Analysts said a company-led investigation by Nvidia into whether CEO Jensen Huang was the target of a foreign spying effort could also stoke volatility. Nvidia shares fell about 3.5% in after-hours trading on the Blue Ocean alternative trading system.
Some dip-buyers might be emerging, analysts say. Chris Weston of Pepperstone said: "The only fundamental this week that matters is price."
Source: Reuters via Investing.com
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