Asian Markets Rally on AI Optimism Ahead of Fed Decision

Asian stock markets mostly advanced on Wednesday, fueled by a surge in technology stocks following major announcements at Nvidia's GTC 2026 conference. Fresh AI-related partnerships and next-generation computing product reveals sparked renewed investor confidence in the semiconductor sector, driving gains across key regional indexes.

South Korea's KOSPI emerged as one of the top performers, surging approximately 4% as chipmaking giants Samsung Electronics and SK Hynix posted impressive gains of between 4.5% and 6%. Japan's benchmark Nikkei 225 also climbed around 2.5%, with the broader TOPIX index following closely behind amid strong export data that pointed to resilient global demand for Japanese goods.

Investor sentiment received an additional lift from a modest pullback in crude oil prices during early Asian trading hours. However, geopolitical tensions continued to weigh on market confidence, particularly after reports of Israel eliminating Iran's security chief and renewed Iranian strikes on oil infrastructure in the United Arab Emirates. These developments raised concerns over potential supply disruptions through the critical Strait of Hormuz shipping corridor.

Broader market momentum remained tempered as traders positioned themselves ahead of the U.S. Federal Reserve's highly anticipated interest rate decision. While the Fed is widely expected to hold rates steady, investors are closely monitoring statements from Chair Jerome Powell for any signals regarding oil-driven inflation and the future direction of monetary policy. Adding to the agenda, the Bank of Japan is set to announce its own rate decision on Thursday, with markets watching for clues on the pace of policy normalization.

Across the region, Singapore's Straits Times Index gained 1%, while Indian Nifty 50 futures edged 0.5% higher. Australia's ASX 200 rose modestly following the Reserve Bank of Australia's widely expected 25-basis-point rate hike. In contrast, Chinese equities bucked the regional trend, with both the Shanghai Composite and Hong Kong's Hang Seng index slipping slightly into negative territory.