Asian stocks extend gains as US rebounds, chipmakers lead

Kospi surges more than 6 percent after rebound in chipmaker stocks on Wall Street

FILE PHOTO: A pedestrian walks past a stock quotation board showing the Nikkei share average outside a brokerage in Tokyo, Japan, Jul 17, 2026. REUTERS

Stocks jumped at the start of trading in Asia on Wednesday as investors took cues from a rebound in US markets, shrugging off climbing oil prices as Houthi rebels threatened to open a front in the widening West Asia conflict.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 1.2 percent as South Korea's Kospi jumped more than 6 percent . Japan's Nikkei 225 gained 1.9 percent , while S&P 500 e-mini futures edged 0.1 percent lower.

Brent crude nudged 0.6 percent higher to $91.55 a barrel after two oil tankers carrying Saudi crude to Asia reversed course in the Red Sea on Tuesday after threats of attack from Yemen's Iran-aligned Houthis.

"Equity markets shrugged off geopolitical risks, focusing instead on tech sector returns," Westpac analysts wrote in a research report. "After large losses in recent days, semiconductor stocks bounced back."

Overnight, the S&P 500 was up 0.9 percent , snapping a three-day losing streak, driven by a rebound in semiconductor shares after data showed Korean semiconductor exports almost tripled during the first few weeks of July and a gauge of Taiwanese export orders for June topped estimates.

Market focus will turn to earnings from Alphabet, which is facing heightened investor scrutiny over the delayed launch of a model key to its AI ambitions, and Tesla, which is widely expected to report its first quarterly cash burn in over two years as its spending on AI and robotics soars.

Pharmaceuticals will also be in focus after US President Donald Trump said all generic drugs brought into the United States will carry a tariff of 0 percent for two years from Aug 1, after which the rate will rise to 100 percent for one year and 200 percent thereafter.

The US dollar index, which measures the greenback's strength against six currencies, held near a one-week high of 101.20. Against the yen, the dollar was down 0.1percent at 163.06 yen, weakening slightly after setting a four-decade high against the Japanese currency on Tuesday.

The jump in oil prices, which settled at a five-week high on Tuesday, did little to unsettle bond and currency markets ahead of central bank meetings next week. Among them, the US Federal Reserve is set to keep its key interest rate steady for the rest of 2026, according to the median forecast of economists in a Reuters poll, though they said the chance of a rate hike is high.

Fed funds futures indicate that though one hike by December is probable, a hike of 50 basis points or more by the end of the year is a coin toss, the CME Group's FedWatch tool showed.

The yield on the US10-year Treasury bond was up 0.2 basis point at 4.628 percent . Gold was up 0.5 percent at $4,097.67.

In cryptocurrencies, bitcoin was up 0.3 percent at $66,611.73, while ether climbed 0.7 percent to $1,936.18.