AI Stocks Power Asian Markets Higher as U.S. Rate-Hike Fears Fade

published at 08.13.2026

Asian stocks rose on Thursday as lower-than-expected U.S. inflation reduced expectations of another interest rate hike by the Federal Reserve next month. At the same time, oil prices declined as investors became increasingly concerned about global demand and the lack of progress in negotiations between the United States and Iran. The MSCI Asia-Pacific index excluding Japan gained 1.08%, led by South Korea, where stocks jumped 3.78%. Japan’s Nikkei also rose 1.67%, supported by strong semiconductor stocks and positive expectations for corporate earnings.

 

Overall, investors remained confident that economic growth is holding up well, although market leadership continues to shift between different sectors. U.S. consumer prices increased by only 0.1% in July, in line with expectations and reducing pressure on the Federal Reserve to raise interest rates in September. Financial markets now see a 34% chance of a rate hike next month, down from 55% a week earlier. Investors are now waiting for U.S. producer price data to see whether it confirms that inflationary pressures are easing.

Japan is moving in the opposite direction when it comes to interest rates. The country’s wholesale prices rose 7.2% in July from a year earlier, showing that inflation remains high. This has increased expectations that the Bank of Japan could raise interest rates as early as September or October, instead of waiting until December. Some reports also suggest that Prime Minister Sanae Takaichi’s government supports a rate hike in the near term. In Australia, Reserve Bank Assistant Governor Christopher Kent warned that another rate increase could be necessary because inflation risks remain high. Meanwhile, the New Zealand dollar fell 0.5% after lower inflation expectations reduced forecasts for aggressive interest rate increases.

One of the strongest sectors in the market continued to be semiconductors, supported by growing confidence in artificial intelligence investment. Sandisk rose nearly 6%, Micron Technology gained almost 5%, and U.S.-listed shares of SK Hynix jumped 9%. AI chip leaders Nvidia and Advanced Micro Devices also moved higher, while the PHLX Semiconductor Index gained 2.49% and moved closer to bull-market territory. The index would need to reach 12,536.99 points to officially enter a new bull market, which means rising at least 20% from its recent low. Strong results from companies such as CoreWeave, Super Micro Computer and Lumentum Holdings have helped convince investors that demand for AI-related technology remains strong.

 

Dan Kemp of Portfolio Thinking said recent results showed strong demand for chips, but he questioned whether the huge amount of money being invested can be supported by actual spending from consumers and businesses. CoreWeave, for example, increased its capital investment plan for the year to between $35 billion and $39 billion, compared with its previous forecast of $31 billion to $35 billion. At the same time, its revenue outlook was much more modest, while its quarterly net interest expense reached $640 million, compared with adjusted operating income of $128 million. This suggests that companies are investing enormous amounts in AI infrastructure, but the financial returns from these investments could take time to appear.

 

The current market offers opportunities, but it also requires discipline. Lower expectations for a U.S. rate hike could continue to support stocks, while strong AI demand could benefit major semiconductor companies and businesses involved in the wider technology supply chain. However, the large investment commitments and high financing costs in the AI sector mean that investors should avoid buying stocks simply because they are connected to artificial intelligence. A more balanced approach would be to focus on companies with strong earnings, healthy cash flow and clear demand for their products.
 

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