Asia Stocks Rise On Trump’s AI Investment Plans: Markets Wrap

(Bloomberg) -- Asian stocks followed their US peers higher on expectations President Donald Trump's administration will lift restrictions on businesses and energy production, boosting the outlook for Corporate America.

Shares in Japan, Australia and South Korea opened higher, while those in Hong Kong looked set to decline. Contracts for US equities advanced in early Asian trading as Trump announced a new investment push for artificial intelligence led by Softbank Group Corp., OpenAI LLC, and Oracle Corp. Treasury yields hovered near their lowest levels of the year.

While it's early days, US-China relations are off to a better-than-feared start after Trump returned to the White House. The US president said he is considering a 10% levy in retaliation for the flow of fentanyl from the country, after threatening 25% for Mexico and Canada. The dollar was little changed.

“Risky assets should benefit from deregulation and tariffs emerging as not so bad as feared,” said Mohit Kumar at Jefferies International Ltd. “For rates, less onerous tariffs and likely lower oil prices should be a positive.”

As markets focused their attention on relations between the two economic superpowers, Chinese Vice Premier Ding Xuexiang told the annual World Economic Forum in Davos, Switzerland, that his nation will expand its imports “to promote balanced trade.” Meanwhile, President Xi Jinping hailed ties with Russia during a video call with Vladimir Putin as he urged deeper cooperation in response to “external uncertainties.” 

Elsewhere in Asia, the Bank of Japan is moving toward deciding to raise interest rates at its policy meeting this week, Kyodo News reported. That supports recent speculation that the bank will hike by 25 basis points. The yen weakened slightly in early trading.

Data from New Zealand on Wednesday showed annual inflation was unexpectedly steady in the final three months of last year, remaining above the midpoint of the central bank's target band.  

Stocks Gain

In US trading, the S&P 500 rose 0.9%, and the Nasdaq 100 added 0.6%. In late hours, Netflix Inc. reported its biggest quarterly subscriber gain in history, benefitting from its first major live sporting events and the return of Squid Game.

A closely watched exchange-traded fund tracking companies with AI exposure hit a three-year high. Small caps climbed on bets they will benefit from a protectionist stance. Trump's flurry of executive orders helped boost space shares, while weighing on electric-vehicle makers. 

“Last week, the equity markets experienced a broad rally, supported by cooler inflation data, upbeat earnings from banks, and a recovery from short-term oversold conditions and negative sentiment,” said Craig Johnson at Piper Sandler. “We expect further upside in equities, supported by the return of Trump's ‘business and investor-friendly' policies.

In commodities, oil held losses as Trump threatened a tariff on China.

Key events this week:

• US Conference Board leading index, Wednesday

• Samsung Galaxy “Unpacked 2025” event, expected to reveal new flagship phone models, Wednesday

• Eurozone consumer confidence, Thursday

• US jobless claims, Thursday

• Bank of Japan policy meeting, Friday

• Eurozone HCOB Manufacturing & Services PMI, Friday

• US University of Michigan consumer sentiment, existing home sales, S&P Global Manufacturing & Services PMI, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.2% as of 9:12 a.m. Tokyo time

• Hang Seng futures fell 0.7%

• Japan's Topix rose 0.6%

• Australia's S&P/ASX 200 rose 0.6%

• Euro Stoxx 50 futures were little changed

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro fell 0.1% to $1.0416

• The Japanese yen was little changed at 155.56 per dollar

• The offshore yuan fell 0.1% to 7.2772 per dollar

Cryptocurrencies

• Bitcoin fell 0.8% to $105,952.31

• Ether was little changed at $3,334.91

Bonds

• The yield on 10-year Treasuries was little changed at 4.58%

• Japan's 10-year yield was unchanged at 1.185%

• Australia's 10-year yield advanced four basis points to 4.44%

Commodities

• West Texas Intermediate crude was little changed

• Spot gold was little changed