BANGKOK (AP) — Asian shares experienced a rally on Friday following a record-setting performance by the Dow Jones Industrial Average, fueled by rising stock prices in key artificial intelligence (AI) sectors while some stocks faced further declines.
U.S. futures showed moderate gains, accompanied by an increase in oil prices. In South Korea, the Kospi index rebounded from a steep drop of nearly 8% on Thursday, gaining 2.8% to close at 7,863.22. Major player Samsung Electronics saw a significant rise of 7%, while its smaller competitor SK Hynix rose by 4.9%.
Meanwhile, in Tokyo, the Nikkei 225 advanced by 0.9% to 69,368.30. However, notable chipmaker Tokyo Electron saw its stock slip by 2.5%, while memory production company Kioxia surged by 6.6%. In Hong Kong, the Hang Seng index climbed 1.7% to 23,444.45, and the Shanghai Composite index added 0.7%, reaching 4,056.81. Conversely, Taiwan’s Taiex dropped by 0.6%.
In Australia, the S&P/ASX 200 improved by 1.3%, closing at 8,834.90. Notably, U.S. markets will remain closed on Friday in observance of the Independence Day holiday.
On Thursday, the majority of U.S. stocks increased in value, with the Dow achieving another record high by climbing 1.1% to 52,900.07. Despite this, several computer chip companies and other beneficiaries of the AI boom experienced price declines, leading to a mixed performance across indexes. The S&P 500 remained virtually unchanged, inching up by less than 0.1% to 7,483.24, even though 70% of the stocks within the index saw gains. In contrast, the Nasdaq composite fell by 0.8% to 25,382.67.
The markets received a boost from a report revealing that U.S. employers added 57,000 jobs to their payrolls in the last month, although this was significantly lower than the anticipated 100,000 jobs and marked a decline from May's hiring rate. Despite the shortfall, the weaker-than-expected jobs data may help alleviate inflationary pressures. Inflation has been rising globally, partly due to spikes in oil prices associated with the ongoing conflict with Iran.
With oil prices currently stabilizing below pre-war levels, a potential slowdown in inflation in the coming months could lessen the Federal Reserve's need to implement multiple interest rate hikes this year. Such a development would be favorable for investors, as lower interest rates typically stimulate economic growth by making borrowing more affordable for households and businesses, consequently boosting investment in stock markets.
Stocks within the cryptocurrency sector also experienced gains after bitcoin's value rose approximately 2%, recovering from near its lowest levels since 2024. Notably, Robinhood Markets gained 3.8%, and Coinbase Global rose by 3.9%. However, significant downturns in computer chip stocks tempered the overall momentum in the markets. Concerns have surfaced that these chip stocks previously appreciated too rapidly in the AI hype cycle, and expectations for profitability and efficiency gains from these investments may not be realized as fully as anticipated.
For instance, memory manufacturer Micron Technology reversed an early gain, ultimately declining by 5.5% after suffering a plunge of 10.6% the previous day. Other major chip stocks also performed poorly; Nvidia dropped by 1.4%, and Lam Research fell significantly by 10.2%. These companies represent heavy weights in the S&P 500, especially since their valuations have surged owing to the AI buzz, with Nvidia boasting a market capitalization of nearly $4.7 trillion, affecting index movements substantially.
In commodity trading on Friday, Brent crude, the global benchmark, experienced a 0.6% increase, reaching $72.26 a barrel, while U.S. benchmark crude rose by 0.5% to $69.05 per barrel. Currency exchange rates also showed movement, with the dollar trading at 161.17 Japanese yen, down from a previous rate of 161.97 yen. Conversely, the euro rose slightly to $1.1439 from $1.1431.
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AP Business Writers Matt Ott and Stan Choe contributed to this report.
Elaine Kurtenbach, The Associated Press
