AI trade outlook brightens on falling oil and Meta’s Muse agent ahead of Xi-Trump meeting
Nasdaq-100 hits record high while chip stocks in China and South Korea rebound, with investors betting that AI earnings can weather higher interest rates
The global artificial intelligence trade is staging a comeback, as a confluence of falling oil prices, Meta Platforms’ launch of a new agentic tool and anticipation surrounding the China-US leadership summit reignite investor interest in technology stocks.
The Nasdaq-100 Index – where tech firms make up nearly 70 per cent of the 100 companies featured – hit an all-time high on Tuesday, surpassing the previous record set in June. In Asia, China’s chip-heavy Star Market 50 Index and South Korea’s Kospi gauge, which is weighted considerably towards memory chipmakers, have been bouncing back since July sell-offs.
The shift appears to mark a reversal in negative sentiment surrounding AI stocks, which had been battered by inflationary fears and calls from some US tech companies to slow the development of new models due to safety concerns. Market sentiment pivoted as oil’s retreat below US$100 a barrel eased inflationary pressure and as Meta’s Muse agent reinforced demand across AI supply chains.
Meanwhile, positive rhetoric from a preparatory trade talk before this week’s sit-down between President Xi Jinping and US President Donald Trump has fuelled optimism for a de-escalation of geopolitical tensions.