Most Asian stock markets rose on Tuesday, buoyed by a rebound in chipmaking and artificial intelligence-related shares that had been hit hard in prior sessions. The mood was also aided by reports that Israel and Iran agreed to halt strikes against each other after U.S. President Donald Trump pressed for a cessation.
South Korea's KOSPI led the region, recovering sharply after steep losses the prior day. The index climbed 3.0% as heavyweight memory-chip stocks rebounded, reversing part of an 8.3% tumble seen previously. Samsung Electronics Co Ltd (KS:005930) climbed 3.4%, while SK Hynix Inc (KS:000660) rose 7.7%. SK Hynix's move was further supported by news of a major partnership with Nvidia.
South Korean economic data also contributed to investor confidence: first-quarter gross domestic product was revised higher to show 1.8% growth for the quarter, with strength in semiconductor exports cited as a primary driver.
Japan's Nikkei 225 benefited from the technology rebound as well, gaining 0.9% after a more than 4% fall in the previous session. The broader TOPIX index added 0.5%. Tokyo Electron Ltd. (TYO:8035) was the leading performer on the Nikkei, jumping 7.6%, while SoftBank Group Corp. (TYO:9984) dipped 0.8%.
Even with the bounce, investors remained cautious on technology names after a significant selloff in recent sessions. Market participants continued to debate whether the AI-led rally had become overextended, and worries about higher interest rates and the impact of the Middle East conflict have encouraged some profit-taking in the sector.
Chinese equities edged higher, with the Shanghai Shenzhen CSI 300 and the Shanghai Composite each up about 0.4% following May trade figures that exceeded expectations. The larger-than-expected trade surplus was driven chiefly by an outsized rise in exports, signaling that export-led growth remains central to China's near-term performance. Imports also outpaced forecasts, reflecting stronger local demand for semiconductors and AI data center components.
Major Chinese technology names that the U.S. added to a blacklist showed mixed moves. Alibaba Group (HK:9988) fell 0.5%, while Baidu Inc (HK:9888) and BYD (HK:1211) inched higher. Hong Kong's Hang Seng index declined 0.2%.
Elsewhere in the region, Singapore's Straits Times index rose 1.1%, while Australia's S&P/ASX 200 lagged, down 0.3% amid weakness in local mining names. Futures for India's Nifty 50 fell 0.2%, signaling a muted open after the index slid 1% in the prior session. Indian equities have generally underperformed regional peers recently as concerns mount over the effects of elevated oil prices on the import-dependent Indian economy.
U.S. futures were slightly firmer during Asian trading hours. S&P 500 futures inched up after President Trump said the U.S. will declare "total victory" over Iran in two weeks, remarks that followed reports of Israel and Iran agreeing to halt mutual strikes following requests from the U.S. president.
Implications for markets
- Chipmakers and AI-related technology stocks were the principal drivers of today's gains across several Asian bourses.
- Trade data and GDP revisions provided macro support, particularly in China and South Korea, where semiconductor exports were highlighted as a growth engine.
- Geopolitical developments between Israel and Iran, combined with commentary from U.S. leadership, influenced risk sentiment and helped lift futures in U.S. markets.
Market context and caveats
Although the rebound in technology and chip stocks helped lift indices, the sector retained signs of fragility after recent steep declines. Investors remain alert to questions about whether the AI rally had outpaced fundamentals, and broader concerns about rising interest rates continue to weigh on sentiment. Additionally, the region's responses to U.S. actions and restrictions on certain Chinese tech firms showed varied market reactions.