Asian stocks jump on rate cut hopes, AI worries ease

Asian markets advanced on Monday, tracking gains on Wall Street as fresh US economic data raised expectations of further interest rate cuts, while concerns over heavy spending on artificial intelligence eased. Gold also climbed to a new record on the softer rate outlook.

Investor confidence improved ahead of the final trading days before Christmas after data showed US unemployment rose to a four-year high in November and inflation slowed more than expected. The figures renewed bets that the Federal Reserve could start lowering borrowing costs early next year, reversing some caution after the central bank earlier hinted at a possible pause.

Asian technology stocks led the rally, with gains in shares of Samsung Electronics, TSMC and Japan’s Renesas. Major markets including Hong Kong, Shanghai, Sydney, Seoul, Singapore, Taipei and Manila closed higher, while Tokyo stood out with a two percent surge, helped by a weaker yen.

Gold rose above $4,388 an ounce, benefiting from lower interest rate expectations and geopolitical tensions linked to US actions against Venezuelan oil shipments and recent developments involving Russian-linked tankers. Silver also reached a fresh high.

Wall Street’s rebound, led by the Nasdaq, was driven by strong earnings from chipmaker Micron Technology and renewed optimism around the AI sector. Sentiment was further supported by news that Oracle will take a 15 percent stake in a TikTok joint venture to keep the app operating in the US.

In currency markets, traders watched the yen closely after Japan’s top currency official warned about its recent sharp declines, raising speculation of possible intervention following the central bank’s rate hike last week.

Oil prices also edged higher, while global equity markets broadly reflected improved risk appetite as investors looked to end the year on a positive note.