Technology stocks led gains in Asia-Pacific markets on Wednesday, mirroring Wall Street's rally as concerns eased over the emergence of a low-cost Chinese AI model. Investors reconsidered the impact of DeepSeek’s AI, suggesting it may lack the scalability to disrupt the industry while potentially boosting demand for GPUs.
Japan's Nikkei gained 0.5%, snapping a three-day losing streak. Australia's ASX 200 climbed 0.8%, with tech stocks surging 2.2%. U.S. futures dipped slightly after the S&P 500 and Nasdaq rose 0.9% and 2% overnight, rebounding from a previous 3% drop triggered by concerns over Nvidia’s valuation.
Investors are now eyeing earnings reports from Meta (NASDAQ:META), Microsoft (NASDAQ:MSFT), and Tesla (NASDAQ:TSLA), with questions surrounding AI-driven computing costs. The Federal Reserve's policy decision is also in focus, though rates are expected to remain unchanged.
The U.S. dollar stayed firm as traders rotated back from safe-haven currencies. The dollar index held at 107.91, while the yen weakened to 155.66 per dollar. The offshore yuan remained stable at 7.2763 per dollar. The Australian dollar dropped 0.4% to $0.6229 after weaker-than-expected inflation data raised rate cut expectations.
Oil prices held gains, with Brent crude at $77.47 per barrel and WTI at $73.82. Traders also monitored renewed U.S. tariff concerns after the White House reaffirmed plans for levies on Canada and Mexico, while weighing potential new tariffs on China.
Trading was thin due to Lunar New Year holidays in China, Hong Kong, Taiwan, Singapore, and South Korea.


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