The US inventory market isn’t the solely market that’s rebounded to file highs.
Stock indexes in Taiwan, South Korea and Japan have clinched contemporary data in current buying and selling periods, bouncing again after tumbling in March.
Asian international locations are closely reliant on oil imports from the Middle East which have largely stalled since the Iran war. But the hit to their economies hasn’t stopped their inventory markets from surging in current weeks.
South Korea’s benchmark Kospi index and Taiwan’s Taiex index each hit a file excessive on Wednesday. Japan’s benchmark Nikkei 225 hit a file excessive final week. Meanwhile, the S&P 500 and Nasdaq Composite in the US additionally each clinched file highs on Wednesday.
The enthusiasm in Asian and US markets is basically due to the international AI increase. The AI-driven rally has overshadowed some of the dangers from the war with Iran. Semiconductor chips are in excessive demand due to the push to construct AI infrastructure, which has significantly benefited markets in Asia.
By comparability, markets in international locations that don’t have the identical stage of publicity to AI – like Europe – haven’t seen these good points.
“Different regions have different potential tailwinds, but like the US, much of Asia is poised to benefit from the AI capex cycle,” mentioned Daniel Skelly, head of Morgan Stanley’s wealth administration market analysis and technique group.
South Korea and Taiwan shine
The United States is a net-energy exporter, whereas international locations like Japan and South Korea are net-energy importers. This means economies in Asia have felt more of the pain of upper oil costs.
But in markets, the AI hype is lifting stocks regardless of issues about larger vitality prices and potential hits to client spending and financial development.
South Korea is a world chief in semiconductor chips, and its inventory market has surged: The Kospi gained nearly 76% in 2025, its finest 12 months since 1999, and is already up 75% to date this 12 months. On Thursday, the surge despatched the Korean fairness market past Canada’s to the world’s seventh largest.
Samsung Electronics soared this week to surpass $1 trillion in market worth, the second Asian firm after Taiwan Semiconductor Manufacturing Company, referred to as TSMC, to hit the milestone.
Meanwhile, Taiwan’s Taiex is up 16% since the war started. The Taiex is up 42% this 12 months. Taiwan in April turned house to the world’s sixth-largest inventory market, additionally surpassing Canada’s market.
“Asian markets are reacting well to the latest peace efforts and the chipmaker momentum,” Jim Reid, head of worldwide macro analysis at Deutsche Bank, mentioned in a be aware.
The Strait of Hormuz successfully closed at the begin of March, choking off a fifth of the international oil provide. Japan’s Nikkei 225 was down a swift 13% by March 31.
But the index rebounded sharply identical to US stocks, erasing its war-related losses and hitting a file excessive on April 16. The Nikkei is up 1% since the war with Iran started and up 18% to date this 12 months.
Investors have leaned into optimism about an finish to hostilities, however the swift rally additionally underscores the significance of the international AI rally. Artificial intelligence, semiconductor firms and information center-related firms account for about 50% of the weight of Japan’s Nikkei 225, in accordance with JPMorgan Chase.
“Investors have gone back to the comfort of where they’re seeing earnings being delivered, and where are earnings being delivered? It’s US tech, it’s the AI ecosystem,” mentioned Arun Sai, senior multi-asset strategist at Pictet Asset Management.
While markets in Asia proceed to hit data, markets in Europe stay under their pre-Iran war ranges.
Similar to Asia, Europe relies on the Middle East for oil. But Europe has fewer tech and AI-focused firms in comparison with the United States and Asia. That’s a part of purpose the area’s markets have but to reclaim file highs.
Germany’s Dax remains to be down greater than 1% since the war started and is roughly flat on the 12 months. Europe’s benchmark STOXX 600 index is down almost 2% since the war started, although it’s up 5% this 12 months.
Meanwhile, energy-exporting international locations in South America have gotten a lift from larger oil costs. Brazil’s Bovespa Index is roughly flat since the war with Iran started however is up 16% this 12 months.
“Asia doesn’t have energy, but it has AI. Latin America doesn’t have AI, but it has energy. Europe doesn’t have much of either,” David Russell, head of worldwide market technique at TradeStation, mentioned.