Trump’s AI Investment Plans Spark Asian Stock Surge: What It Means for Markets

Asian equities saw gains as former U.S. President Donald Trump’s renewed focus on artificial intelligence (AI) investments sparked optimism across the region’s tech sector.

The announcement of a new AI initiative, spearheaded by major players like SoftBank Group Corp., OpenAI LLC, and Oracle Corp., bolstered market sentiment, particularly in Taiwan and Japan, where stocks posted the largest gains.

Contracts for U.S. equities also advanced, with the S&P 500 closing 0.9% higher. However, markets in Hong Kong and China opened lower amid lingering concerns over U.S.-China trade tensions.

Tech Surge Driven by AI Optimism

Vicki Chi, a money manager for Asian equities at Robeco in Hong Kong, highlighted the positive impact of AI developments on the region’s technology supply chain. “The Asian technology supply chain has already performed very well, and the renewed AI push will continue to support these stocks,” Chi stated on Bloomberg TV.

She also noted that while corporate productivity has seen benefits from AI, 2025 could be the year when consumers begin to feel tangible changes from its adoption.

The AI-focused investments, which include SoftBank’s participation in the ‘Stargate’ AI joint venture, propelled SoftBank’s shares over 9%, marking their highest levels since July.

China Faces Trade Challenges

While optimism around AI investments boosted tech stocks, concerns over U.S.-China trade relations weighed on market sentiment. Trump reiterated his plan for a 10% tariff on Chinese imports in response to the fentanyl crisis, keeping investors cautious.

Frederic Neumann, Chief Asia Economist at HSBC in Hong Kong, noted the potential slowdown in China’s exports due to these tariffs. “China will need to brace for potential tariffs, which come at a challenging time for its economy,” Neumann explained. He emphasized that China’s options are limited, apart from pursuing negotiations.

Chinese Vice Premier Ding Xuexiang, speaking at the World Economic Forum in Davos, sought to reassure global markets by promising to expand imports to promote balanced trade. Meanwhile, President Xi Jinping reaffirmed stronger ties with Russia during a video call with Vladimir Putin, signaling deeper cooperation amid “external uncertainties.”

Mixed Signals from Japan and Commodities

Elsewhere in Asia, speculation grew around the Bank of Japan’s monetary policy. Reports suggested the central bank may raise interest rates by 25 basis points during its upcoming policy meeting. This has added to recent market discussions about potential shifts in Japan’s ultra-loose monetary stance. Despite this, the yen slipped slightly against the dollar.

In commodities, oil prices declined as concerns over U.S.-China trade relations dampened sentiment. Gold remained near its highest level since November, reflecting continued uncertainty in the global economy.

Global Market Highlights

In U.S. markets, Netflix Inc. reported record quarterly subscriber growth, benefiting from new live sporting events and the return of its hit series, Squid Game. Additionally, a closely watched exchange-traded fund (ETF) tracking companies with AI exposure reached a three-year high, reflecting investor enthusiasm for the sector.

Craig Johnson of Piper Sandler expressed optimism about the equity markets, citing cooler inflation data, strong bank earnings, and the return of pro-business policies under Trump. “We expect further upside in equities, supported by these factors,” Johnson noted.

Conclusion

While Asian stocks gained momentum on the back of Trump’s AI investment push, the broader market remains cautious amid unresolved trade tensions and geopolitical uncertainties.

As AI technology continues to reshape industries, the region’s tech sector looks poised to reap the benefits, though macroeconomic headwinds could temper these gains. Investors will be closely monitoring policy developments and trade negotiations in the coming weeks.