Asian Stocks Rise as Investors Weigh AI Spending and Fed’s Hawkish Tone

Asian stocks climbed on Monday as investors assessed last week’s earnings from major tech firms that highlighted massive investments in artificial intelligence (AI), while the U.S. dollar held firm near a three-month high following hawkish comments from Federal Reserve officials.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.2% to 726.98, close to its 4.5-year peak, and is up over 27% this year—on track for its best annual performance since 2017. With Japan’s markets closed for a holiday and no U.S. Treasuries trading, overall activity was subdued during Asian hours.

Meanwhile, gold prices slipped 0.4% to $3,985.35 per ounce, extending losses from recent record highs. Oil prices rose as OPEC+ opted to delay production increases in early 2025, calming fears of an oversupply. Brent crude rose 0.49% to $65.10 a barrel, and West Texas Intermediate (WTI) gained 0.61% to $61.33.

In the U.S., several Fed policymakers expressed unease over the recent rate cut, even as Governor Christopher Waller backed more easing to support the slowing labor market. Fed Chair Jerome Powell signaled that another cut in December was “not a foregone conclusion,” surprising traders who had expected it. Markets now price a 68% chance of a December rate cut, down from near certainty before last week’s 25-basis-point reduction.

The dollar stayed strong, with the euro at $1.1524, sterling at $1.3134, and the yen near 154.18 per dollar. As the U.S. government shutdown drags on, data releases such as job openings and nonfarm payrolls will be delayed.

Investors remain focused on corporate earnings, especially from AI-driven tech companies like AMD, Qualcomm, and Palantir, whose results will shape sentiment for the sector’s growth potential.