Markets rebound as stocks, metals and oil recover after Asia-wide sell-off

Global markets steadied on Tuesday, with equities rallying and precious metals and oil rebounding after a sharp sell-off that had rippled across Asian trading floors a day earlier.

The recovery was supported by a strong rally on Wall Street, where investors were encouraged by better-than-expected US manufacturing data that renewed optimism about the world’s largest economy. The figures showed US factory activity expanded in January at its fastest pace since 2022, marking the first expansion in a year.

Asian markets had come under heavy pressure at the start of the week as the US dollar surged following President Donald Trump’s decision to nominate Kevin Warsh to lead the Federal Reserve. Warsh, a former Fed governor and Morgan Stanley investment banker, is widely seen as the most hawkish of Trump’s candidates, raising expectations that US monetary policy could remain supportive of a stronger dollar.

The appointment helped reverse last week’s slide in the US currency, which had weakened amid speculation that the White House was comfortable with a softer dollar to boost exports. It also eased concerns about the Federal Reserve’s independence.

The dollar’s sharp rebound triggered steep losses in precious metals, with gold sliding to around $4,402 and silver falling to about $71 after both had surged to record highs in recent weeks. Selling pressure was intensified by easing tensions between the United States and Iran, after Trump expressed optimism about reaching a deal with Tehran, reducing demand for safe-haven assets.

Oil prices were also hit hard during the sell-off, as the stronger dollar and reduced geopolitical risk prompted investors to exit energy markets.

Some stability returned on Tuesday as investors moved back into risk assets. South Korea led gains in Asia, with Seoul’s benchmark index jumping around five percent after falling by a similar amount the previous day. The market has risen roughly 20 percent this year, driven by strong interest in artificial intelligence and semiconductor stocks.

Analyst Chung Hae-chang of Daishin Securities said Monday’s decline was not driven by fundamentals in the AI or chip sectors, but by sharp drops in liquidity-sensitive assets such as gold and silver, which triggered margin calls and broader asset adjustments.

Other major markets also recovered, with Tokyo climbing more than three percent, while Hong Kong, Shanghai, Sydney, Singapore, Taipei and Manila all posted gains.