This content was published on
July 21, 2026 - 05:01
6 minutes
(Bloomberg) — Asian equities rose for the first time in four days as investors returned to chipmakers, driving a rebound in the sector after the recent selloff. Oil declined.The MSCI Asia Pacific Index climbed 1.7%, with chip giants Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co. the two biggest contributors. Benchmark gauges in South Korea and Taiwan both gained about 3%. Japan’s Nikkei 225 Stock Average rose 1.7% after slipping into correction territory on Friday, as trading resumed following a long weekend.US equity-index futures reversed earlier losses, with contracts for the Nasdaq 100 Index rising as much as 0.6%. Earlier, a gauge of US chip stocks rebounded from last week’s selloff.Also supporting sentiment was a pullback in oil. Brent crude fell 0.7% to about $88.55 a barrel even as traders watched for disruptions to Saudi Arabian exports after Houthi rebels threatened to blockade an export route through the Red Sea. Worries that higher energy costs may boost inflation had weighed on bonds Monday.Elevated oil prices and escalating Middle East tensions are giving investors another reason for caution, adding to the rotation out of chip stocks after this year’s blistering rally. Investors are now turning to megacap earnings later this week for clues on whether this year’s AI-driven rally can be sustained.“The market has already undergone a fairly substantial correction,” said Ikuo Mitsui, a fund manager at Aizawa Securities Co. “At the same time, corporate earnings have held up reasonably well and have proved more resilient than expected.”This week brings the first results from the US megacaps, and pressure is building for the companies to justify AI investments. Tesla Inc. and Alphabet Inc. kick off big tech’s reporting season Wednesday. Then, Microsoft Corp., Meta Platforms Inc., Apple Inc. and Amazon.com Inc. announce the following week.Investors will be looking to Alphabet’s earnings for updates on spending and semiconductors after a report said that the company is developing a server chip designed to optimize its Gemini artificial intelligence model.The semiconductor, called Frozen v2, may be deployed as soon as 2028, the Information reported Monday, citing unnamed people familiar with the matter.“A brutal month for chip stocks has sharpened scrutiny of the AI spending wave,” said Josh Gilbert, APAC and Mideast lead analyst at Etoro. “Capital expenditure commentary will matter just as much as the headline numbers.”If the megacap companies keep spending aggressively and can show revenue to back it up, the recent rotation out of tech is unlikely to persist, he said.Elsewhere, the Canadian dollar held steady after the Trump administration vowed to impose a fresh 50% tariff on some of the country’s goods. Treasuries held losses from Monday, while gold climbed 0.5% to trade around $4,025 an ounce. The New Zealand dollar advanced against its major peers after inflation data rose higher than expected, supporting the case for further interest-rate hikes.The pound held its declines from the previous session after the UK’s new prime minister Andy Burnham named former Defense Secretary John Healey to be his Chancellor of the Exchequer in a surprise move.UK gilts fell Monday after Burnham unnerved investors over his approach to the country’s finances. The selloff pushed yields on longer-maturity bonds to their highest since late May after Burnham said he will seek “any flexibility” while following the government’s borrowing and spending rules.Attention, however, remains firmly on the tech sector. For now, there’s little evidence that the latest escalation in the Middle East will weaken economic growth, enough to change the pro-risk stance, BlackRock Investment Institute strategists led by Jean Boivin wrote in a note.“The AI investment boom — an important driver of growth — and our preference for AI infrastructure remain intact despite recent volatility,” the strategists wrote. “Today’s global economy is also far less oil-intensive than previous energy shocks, making it more resilient to higher energy prices.”Corporate News:A federal judge temporarily paused Paramount Skydance Corp.’s $110 billion takeover of Warner Bros. Discovery Inc. saying it “likely” violates antitrust law. SBI Funds Management Ltd. is poised for a strong trading debut Tuesday after investors piled into its $1 billion initial public offering, making it one of India’s most heavily subscribed billion-dollar share sales. Alibaba Group Holding Ltd.’s e-commerce service was fined €550 million ($629 million) by the European Union for selling illegal products in the largest penalty under the bloc’s content moderation rulebook. Jijia Vision is in discussions to hold an initial public offering on Hong Kong’s stock exchange as soon as this year, joining a flurry of Chinese AI firms planning public market debuts. Some of the main moves in markets:StocksS&P 500 futures rose 0.2% as of 11:58 a.m. Tokyo time Japan’s Topix rose 1.8% Australia’s S&P/ASX 200 fell 0.1% Hong Kong’s Hang Seng fell 0.6% The Shanghai Composite rose 0.2% Euro Stoxx 50 futures fell 0.4% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1411 The Japanese yen was unchanged at 162.50 per dollar The offshore yuan was little changed at 6.7678 per dollar CryptocurrenciesBitcoin rose 0.1% to $65,400.53 Ether rose 0.7% to $1,917.08 BondsThe yield on 10-year Treasuries was little changed at 4.59% Japan’s 10-year yield advanced two basis points to 2.725% Australia’s 10-year yield was little changed at 4.95% CommoditiesWest Texas Intermediate crude fell 0.3% to $82.98 a barrel Spot gold rose 0.7% to $4,036.89 an ounce This story was produced with the assistance of Bloomberg Automation.–With assistance from Momoka Yokoyama, Matthew Burgess and Bing Hong Lok.©2026 Bloomberg L.P.
