Tech-Driven Asian Rally Takes Flight Following Strong U.S. Market Momentum

Tech stocks have fueled a broader Asian market recovery during thin holiday trading, riding momentum from Wall Street’s impressive performance. The momentum builds as investors digest strong economic data and recalibrate expectations around monetary policy globally.

U.S. Market Sets Bullish Tone

Wall Street delivered its fifth consecutive daily gain on Christmas Eve trading before the holiday closure. The Dow Jones Industrial Average climbed 0.6 percent to fresh record highs, while the S&P 500 added 0.3 percent, also marking new closing records. The Nasdaq Composite edged up 0.2 percent as technology shares led the advance.

Economic tailwinds provided the foundation for the rally. U.S. third-quarter GDP expanded at an annualized 4.3 percent, significantly outpacing the 3.2 percent consensus forecast. Jobless claims declined for a second consecutive week, though consumer confidence readings remained mixed, indicating an uneven recovery pattern.

Asian Equities Capitalize on External Strength

Shanghai Composite Index inched forward 0.10 percent to 3,963.68 following volatile trading. Currency movements supported regional sentiment, as the offshore yuan broke past the psychologically important 7-per-dollar level—the first time since September 2024. This appreciation reflects central bank tolerance for gradual currency strength aimed at bolstering market confidence.

Japanese bourses demonstrated the strongest regional reaction. The Nikkei 225 Index rose 0.68 percent to 50,750.39, while the broader Topix Index gained 0.15 percent at 3,423.06. The government’s revised economic forecast for fiscal year-end March and an announced record $785 billion budget for the next fiscal year underpinned investor optimism about future consumption and capital spending. Despite mixed November economic data—industrial production fell more than expected while retail sales grew modestly—markets brushed aside the weakness. Jobless claims held steady at 2.6 percent. Tech-related names led individual stock performance, with Fast Retailing, SoftBank and Advantest each rising roughly 2 percent.

South Korean equities outperformed peers, with the Kospi Index advancing 0.51 percent to 4,129.68, bringing its 2024 annual gain to 72 percent. Technology was the primary driver: Samsung Electronics soared 5.3 percent, SK Hynix rallied 1.9 percent and AI-focused SK Square climbed 4.2 percent.

Commodities Surge on Macro Backdrop

Precious metals rallied sharply, fueled by dollar weakness and geopolitical tensions. Silver jumped past $75 per ounce for the first time ever, while gold struck fresh record territory at $4,531 per ounce. Market participants are pricing in two Federal Reserve rate cuts by end-2026. Oil markets rose on supply concerns, particularly surrounding Venezuela. Reports indicate the White House has directed military enforcement of Venezuelan oil sanctions for at least two months, while Ukrainian attacks on Russian energy infrastructure—including refineries and pipelines—add further supply uncertainty to the calculation.