Asian Markets Rally as Tech Appetite Defies AI Earnings Volatility

The tech-driven momentum persisted despite a sharp 8.8% pullback in AMD shares, which struggled to meet elevated investor expectations, and a 7.5% drop in SpaceX following concerns over cash flow consumption. Pepperstone’s head of research Chris Weston noted that while operational execution remains strong for such firms, the sheer cost of compute power necessitates a long-term focus on capital funding strategies. The market’s attention now shifts to Thursday, when 912 million pre-IPO shares could hit the market.

Simultaneously, energy markets signaled a cooling trend. Brent crude slid to $78.85 a barrel amid reports of diplomatic progress regarding the Strait of Hormuz. CBA energy economist John Oh suggested that resilient ship tracking data points toward potential oversupply, effectively tempering inflation fears. This retreat in oil prices provided a tailwind for government bonds, pulling 10-year Treasury yields down to 4.603%. Consequently, market expectations for a September Federal Reserve rate hike softened, falling to 57% from 67%, even as regional Fed officials maintain a hawkish stance on reaching a 2% inflation target.