Asian Stocks Rebound as Tech Shares Rally on Fed Rate Cut Hopes and Easing Iran Tensions

Asian stock markets rebounded sharply on Friday as investors returned to technology shares following a week of heavy selling, while easing geopolitical tensions and growing expectations of Federal Reserve interest rate cuts boosted overall market sentiment.

The recovery came after a volatile stretch for global technology stocks, where concerns over the pace of artificial intelligence (AI) infrastructure spending triggered widespread profit-taking. Despite ongoing questions about whether massive AI investments will deliver strong long-term returns, many investors viewed the recent decline as an opportunity to buy high-quality semiconductor and technology companies at lower valuations.

Optimism was also supported by developments in the United States. The Dow Jones Industrial Average closed at a record high ahead of the U.S. Independence Day holiday, while Nasdaq 100 and S&P 500 futures traded higher during the Asian session. Softer U.S. labor market data reinforced expectations that the Federal Reserve could begin easing monetary policy later this year, improving appetite for risk assets.

Investor confidence received another boost after President Donald Trump said tensions with Iran had eased and expressed confidence that Tehran was willing to resume negotiations. The comments helped keep oil prices relatively stable, reducing concerns over energy-driven inflation and supporting global equity markets.

South Korea led regional gains, with the KOSPI surging 2.7% after two consecutive sessions of steep losses. Technology giants spearheaded the rebound, with Samsung Electronics climbing 6.5% and SK Hynix advancing 4.2%. Although both stocks remain significantly lower for the week, bargain hunting fueled renewed buying interest across the semiconductor sector.

The rally extended throughout Asia’s chip industry. Japan’s TOPIX gained 0.8%, supported by strong performances from Kioxia Holdings, Rohm, and Sumitomo Chemical following earlier weakness. Chinese equities also recovered, with the CSI 300 and Shanghai Composite posting solid gains after encouraging private-sector services PMI data indicated continued expansion in domestic demand.

Elsewhere, Australia’s S&P/ASX 200 advanced 1.2% after stronger services activity signaled improving business conditions, while Indonesia’s benchmark index climbed 2.2%. Hong Kong’s Hang Seng Index also strengthened, extending its weekly gains.

Looking ahead, investors will closely monitor Thailand’s inflation report and Bank Negara Malaysia’s upcoming policy meeting. Inflation data from China, Taiwan, and the Philippines will also be watched closely as markets assess the outlook for regional monetary policy alongside evolving global technology trends and expectations for Federal Reserve rate cuts.