Asian Markets Surge Thanks to AI Promises; U.S. Futures and Oil Prices Rise

Post by : Bianca Suleiman

Asian stock markets opened the new year positively on Friday, spurred by a leading surge in technology shares. Hong Kong's Hang Seng index recorded a remarkable 2.2% increase, closing at 26,189.79, fueled by substantial gains in tech and e-commerce sectors.

Alibaba, a major player in e-commerce, increased by 3.2%, while Baidu's shares skyrocketed by 7.5%. The drastic rise in Baidu's stock followed its announcement regarding the spinoff of Kunlunxin, its AI chip division, with aspirations to be listed in Hong Kong by early 2027, contingent on regulatory clearance.

Key markets in Tokyo, Shanghai, Thailand, and New Zealand remained closed, leading to varied activity across the region.

South Korea's Kospi index advanced 1.5% to 4,277.94, while Australia's S&P/ASX 200 saw a slight rise of 0.2% to 8,727.30. Taiwan's Taiex increased by 1.1%, and India's Sensex added 0.1% to its value.

This upward trend suggests rising expectations that the artificial intelligence sector will enhance demand for computer chips and the necessary infrastructure for data centers, promoting tech sector expansion across Asia.

Despite recent sluggish manufacturing indicators in the area, trade volumes appear robust. Analyst Shivaan Tandon from Capital Economics noted a notable uptick in exports, indicating a promising short-term outlook for Asia's export-driven manufacturing sectors.

U.S. Futures and Commodities Show an Upsurge

U.S. stock futures opened higher on Friday, with S&P 500 futures increasing by 0.5% and Dow Jones Industrial Average futures up by 0.3%, outlining a positive year-start.

On the last trading day of 2025, U.S. markets faced declines amid an otherwise strong yearly performance. The S&P 500 closed 0.7% lower at 6,845.50, with the Dow seeing a decrease of 0.6% to 48,063.29, and the Nasdaq down by 0.8% to 23,241.99.

The S&P 500 marked 39 record highs throughout 2025, ending the year with a 16.4% increase. The Nasdaq gained 20.4%, and the Dow finished 13% higher, buoyed by investor enthusiasm surrounding AI’s potential to uplift corporate profitability across sectors.

Wall Street’s performance in 2025 also benefitted from reduced trade tensions, including President Donald Trump’s suspension of tariffs, new trade negotiations, solid corporate earnings, and three interest rate cuts by the Federal Reserve.

The Fed is widely expected to maintain current interest levels during its January meeting.

Labor Department data indicated a slight dip in new unemployment claims last week, reflecting consistent layoffs amidst a shaky labor market.

Sector Performance and Commodity Trends

All sectors of the S&P 500 concluded Wednesday lower, with technology stocks experiencing the most significant drops. Western Digital fell by 2.2%, and Micron Technology saw a decline of 2.5%, despite being key winners for the year.

In the commodity sphere, silver made a comeback with a 3.5% increase following an earlier significant drop. It experienced an annual surge of over 140%. Gold also climbed 1.1%, ending 2025 with a staggering increase of 63.7%.

U.S. benchmark crude oil prices edged up by 35 cents to $57.77 per barrel, whereas Brent crude also rose 35 cents to $61.20 per barrel.

In currency markets, the U.S. dollar saw a slight rise against the Japanese yen, shifting from 156.75 to 156.80 yen, while the euro strengthened slightly to $1.1760 from $1.1746.