Asian Equities Claw Back Gains, but US Data Looms

On Monday, Asian equities bounced back, with Japan's Nikkei 225 climbing 3.39% and South Korea's KOSPI increasing 1.52%. Both indexes had lost roughly 6% on Friday, mirroring a Nasdaq selloff rather than anticipating it.

According to CNBC, Nasdaq 100 futures were 0.3% higher on Sunday evening. This gives US technology stock holders only a narrow edge after Thursday's slump.

Are Asian Markets Setting the Pace or Mirroring Wall Street?

The KOSPI initiated at 5,034.20, beneath its Friday closing of 5,059.69, and temporarily slipped below 5,000. However, it recovered to 5,136.46 by 11:07 a.m. Seoul time.

In parallel, the Nikkei hit 59,411, a rise of 1,948.30 points. This eliminates just over half of Friday's 3,643.13-point decline.

In contrast, the KOSPI's 1.52% gain, per the WSJ, only covers about a quarter of its over 6% drop on Friday.

Friday's Asian market slump came after the US selloff, not before it. The Nasdaq Composite had fallen 5.5% on Thursday.

The Nasdaq Composite then rose 1.1% on Friday, AP data showed, a pattern that Monday's Asian rally appears to follow.

Will the Rally Withstand Tuesday's Inflation Report?

Nasdaq 100 futures first declined 0.8% on Sunday night before reversing, CNBC reported. Liz Ann Sonders, chief investment strategist at Schwab Center for Financial Research, described the Nasdaq indexes as oversold.

Furthermore, the US CPI report is due on Tuesday, with earnings from CoreWeave, Cisco, and Applied Materials planned for this week.

Fed funds futures indicated roughly a 65% chance of a December rate hike as of Thursday.

A higher CPI figure could boost those odds and stress growth stocks, while a lower one could reduce that stress. The WSJ reported that Thursday's selloff originated from concerns that Democratic midterm gains might slow AI data center construction.

Thus, Asia's chip-centric benchmarks stay tied to US policy and inflation news, and Monday's gains could dissipate quickly.