(Dec 12): Asian stocks were set for a strong start Friday after US shares hit a fresh record, with optimism around the Federal Reserve’s easing cycle helping offset concerns about heavy AI-infrastructure spending.
Equity index futures for Japan, Australia and Hong Kong pointed to gains in early Asian trading, after the S&P 500 climbed 0.2% Thursday. The tech-heavy Nasdaq 100 fell 0.4%, after paring sharper earlier losses driven by a disappointing earnings report for Oracle Corp that revealed heavy spending and revenue that fell short of estimates.
Thursday’s action lifted the MSCI All Country World Index — one of the broadest measures of the stock market — to a new closing high and places the global equity benchmark on track for its best year since 2019.
Treasuries whipsawed, leaving yields fractionally higher after trading lower through most of Thursday. Data showed that initial jobless claims rose more than expected in the Dec 6 week. An index of the dollar, meanwhile, traded around a two-month low.
Gold climbed more than 1% Thursday, closing in on a new record, while silver set its third daily closing high and has more than doubled this year. Oil fell and bitcoin flip-flopped in a tight range around US$93,000.
In Asia, data set for release includes industrial production for Malaysia and Japan, and inflation for India. Thai Prime Minister Anutin Charnvirakul moved to dissolve parliament, setting the stage for an early election after reports of a key political party backing his minority government moving to withdraw its support.
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Despite the record highs for US stocks, some caution for tech names persisted after Oracle’s results pushed worries about tech valuations and whether heavy spending on AI infrastructure will pay off back into focus.
While the sector has powered the S&P 500’s stunning rally this year, spending fears have prompted some investors to rotate into other areas as the US economic outlook remains robust. Nvidia Corp fell 1.6% Thursday while the Magnificent Seven index of tech giants dropped 0.6%.
“Markets have grown far more wary of AI-related spending, which is a sharp contrast with mid-2025 when anything hinting at higher capex sparked excitement,” said Susana Cruz, a strategist at Panmure Liberum. “Oracle has been the weakest link in all this, largely because it’s funding a big chunk of its investment with debt.”
See also: Asian stocks to rise as Fed’s rate cut lifts mood
Fresh highs for US stocks follow the Federal Reserve’s rate cut this week and signs further easing remains in play next year. Traders stuck to bets on two cuts in 2026, even as the Fed’s new projections signaled only one such move.
“The effect of Oracle has been greater than the Fed. This already tells us everything as we’ve been witnessing a strong concentration and one theme — AI — leading the market,” said Alberto Tocchio, a portfolio manager at Kairos Partners. “This doesn’t mean that AI is gone or it’s a bubble, but we need to focus on a wider scale.”
Fed Chair Jerome Powell suggested that the Fed had now acted sufficiently to help stabilise the labor market while leaving rates high enough to continue weighing on price pressures. Officials upgraded their median outlook for growth in 2026, to 2.3% from the 1.8% they projected in September. They also foresaw inflation declining to 2.4% next year, from the 2.6% in the previous projection.
“The Fed’s ‘hawkish-but-bullish’ cut last night reinforces this: stronger 2026 growth, faster disinflation,” said Florian Ielpo, head of macro at Lombard Odier Investment Managers. “Cuts are continuing, but they’re no longer automatic — and that’s usually a constructive backdrop for equities.”
Uploaded by Isabelle Francis
