AI optimism lifts Asian shares toward records; dollar firms as Fed cut hopes cool.
Stellar results from Taiwanese chipmaker TSMC breath new life into the AI trade
Asian stocks advanced on Friday as renewed momentum in the artificial intelligence sector lifted sentiment, while the dollar hovered near a six-week high after strong U.S. economic data prompted investors to scale back expectations for interest rate cuts.
Oil prices steadied after sharp losses, while safe-haven gold and silver declined after U.S. President Donald Trump struck a more cautious tone on unrest in Iran, stepping back from earlier threats of intervention.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5%, hovering near a record high reached in the previous session. Strong earnings from Taiwanese chipmaker TSMC reinvigorated the AI trade, while a U.S.-Taiwan trade agreement announced on Thursday reduced tariffs on key semiconductor exports and encouraged fresh investment into U.S. technology—though the deal risks heightening tensions with China.
Overnight, gains in technology and financial stocks lifted Wall Street. Nasdaq futures added 0.22% in Asian trading, while S&P 500 futures rose 0.15%.
“There’s been lingering doubt around capex spending and AI more broadly, but the TSMC results were solid and optimistic,” said Tony Sycamore, market analyst at IG. “They didn’t spark a rally, but they provided much-needed reassurance that the AI story remains intact.”
Japan’s Nikkei slipped 0.42%, weighed partly by a firmer yen, which rebounded from an 18-month low earlier in the week.
European futures pointed lower after a strong prior session, with EUROSTOXX 50 futures down 0.38% and FTSE futures easing 0.18% following record highs for European shares on Thursday.
In currency markets, the dollar held near a six-week peak after a run of upbeat U.S. data, including a surprise drop in weekly jobless claims. The dollar index stood at 99.36, close to Thursday’s high of 99.493, its strongest since early December.
The euro hovered near a 1½-month low at $1.1606, while sterling slipped 0.06% to $1.3376.
“Mounting evidence of stable labour conditions is lowering the odds of an April rate cut,” said Jose Torres, senior economist at Interactive Brokers, adding that markets increasingly expect the next policy easing to come later in the year.
According to CME FedWatch, markets now assign a 67% probability that the Federal Reserve will keep rates unchanged in April, up from 37% a month ago. The likelihood of a hold in June has also risen sharply.
The yen strengthened slightly to 158.48 per dollar but remained close to its recent 18-month low, pressured by speculation that Japan could hold a snap election as early as next month—an outcome investors believe could lead to expanded fiscal stimulus.
Oil prices edged higher after steep losses a day earlier, as Trump’s softer stance on Iran eased concerns over potential supply disruptions. Brent crude rose 0.11% to $63.83 a barrel, while U.S. crude gained 0.2% to $59.31.
Spot gold slipped 0.16% to $4,607.50 an ounce.
