GLOBAL MARKETS: Asia markets hit records on AI euphoria, Iran peace hopes

Stocks leapt, oil prices sank and the dollar dropped in the Asian morning on Wednesday after U.S. President Donald Trump touted "great progress" towards a "final agreement" with Tehran, while momentum in AI-driven trades accelerated.

Trump said he would briefly pause an operation escorting ships through the Strait of Hormuz, which carries about a fifth of global oil and has been blockaded by Iran since late February, triggering a global energy crisis.

The news sent Brent crude LCOc1 tumbling 1.2% to $108.51 per barrel, while S&P 500 e-mini futures EScv1 were up 0.3%.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS jumped 2.3% to a fresh record, led by a 5.1% surge in South Korea's Kospi .KS11, clearing the 7,000 mark for the first time.

"Markets embraced a sense of calm and stability overnight, with the risk of escalation in the Middle East conflict viewed as having diminished after U.S. Defence Secretary Pete Hegseth ensured the ceasefire was still in place, despite the U.S. and Iran trading blows yesterday," analysts from Westpac wrote in a research note.

"This put some wind in the sails for risk sentiment, supporting a rebound in equities across the U.S. and Europe at the same time as crude oil prices partially unwound yesterday’s climb."

Stocks on Wall Street hit fresh records on Tuesday as the S&P 500 .SPX rose 0.8% and the Nasdaq Composite .IXIC gained 1%.

"Investors bought and continue to add to positioning in the 2026 winners," said Chris Weston, head of research at Pepperstone Group Ltd in Melbourne. "There has been some buying in S&P 500 materials stocks, but it’s tech that continues to attract the bulk of flows, notably in Apple and the memory plays."

As the Seoul market reopened after a holiday, Samsung Electronics 005930.KS jumped 12%, topping a $1 trillion market value, overtaking Berkshire Hathaway BRKa.N and closing in on Walmart WMT.O.

"Due to the capex spend we are seeing from hyperscalers in the U.S., the earnings growth trajectory for sectors such as semiconductors, tech hardware, industrials and materials in Asia exceeds anything I have seen in a long-time," said Rushil Khanna, head of equity investments for Asia at Ostrum, an affiliate of Natixis Investment Managers.

"This capex is leading to material value creation in Asia as the provider of the picks and shovels to the AI ecosystem," he said.

Shares in Advanced Micro Devices AMD.O jumped 16.5% in extended trading as the company forecast second-quarter revenue above Wall Street expectations on Tuesday, helped by keen demand for its dead-centre chips as cloud-computing companies accelerate spending on AI infrastructure.

In the foreign exchange markets, the U.S. dollar index =USD, which measures the greenback's strength against a basket of six currencies, snapped a three-day winning streak, nudging down 0.1% to 98.236.

The euro stood at $1.1724 EUR= and sterling was at $1.3577 GBP=D3, both up around 0.3% so far on the day.

The Australian dollar fetched $0.7227 AUD=D3, rising about 0.6% to the highest since June 2022, buoyed by improved risk appetite and underpinned by a third straight interest-rate hike a day earlier.

The yield on the U.S. 10-year Treasury bond was flat at 4.424%.

Gold XAU= was 1.2% higher at $4,609.59. In cryptocurrencies, bitcoin BTC= was down 0.9% at $80,881.12, while ether ETH= was off 1% at $2,358.09.

-Gregor Stuart Hunter/Reuters