Asian markets rally, Nvidia stock faces test, oil steadies

Roundup

• Equities:
  • The Nikkei 225 jumped roughly 3.3% to above 59,300. The Topix rose nearly 3.4%, and the Kospi added around 1.4%.
  • Memory chipmakers staged a rebound. SK Hynix climbed around 4.6% and Samsung rose about 2.4%, although Goldman's AI memory basket is 51% below its June peak.
  • China's extension of the suspension of its 24% tariff on US goods provided a risk-positive background for APEC.
• Nvidia: The stock faces its first full trading session on Wall Street tonight after CEO Jensen Huang acknowledged a relationship with a person US officials suspect of being a Chinese intelligence asset. Nvidia's board started an independent investigation.
• Oil:
  • Crude dropped following Trump's "highly unlikely" remarks on strikes, then recovered to flat after Rubio stated talks with Iran were unproductive.
  • Strikes at Iraq's Khor Mor gas field and Riyadh's Aramco Tower, plus the new Task Force Iron Gate, sustain the risk of escalation. Qatar affirms a deal remains pursued.
• China: PPI grew 5.7% from a year earlier, the fastest since 2022. CPI slowed to 0.7%, and the core rate eased to 0.8%.
• FX:
  • USD/JPY stayed near 158.30 after data confirmed Japan intervened with a record $50 billion in a single day in July.
  • The New Zealand dollar rose around 0.7% as its election remained too close to call.
• Gold and bitcoin: Gold gained around 1.3% to near $4,130 despite Goldman downgrading its forecasts. Bitcoin fell under $75,000.

Stocks: Asia buys the dip

Asian equities staged a strong rally on Monday, looking past the weekend's Nvidia controversy and a spate of Middle East escalation headlines. Japan was in the lead, the Nikkei 225 jumping around 3.3% to above 59,300 and the Topix rising nearly 3.4%. South Korea's Kospi added around 1.4%, and the Kosdaq rose almost 2%. China and Hong Kong saw more muted gains. The Shanghai Composite gained about 0.5%, and the Hang Seng inched up. S&P 500 and Nasdaq 100 futures also strengthened, both up about 0.5%.

The recovery in memory chipmakers stood out. SK Hynix rose around 4.6% and Samsung Electronics added about 2.4%. This is a sharp reversal for a segment that has carried the brunt of the AI selloff. According to Bloomberg, a Goldman Sachs basket of AI memory stocks is 51% off its June peak, its deepest decline since ChatGPT launched. JPMorgan argues the market is already discounting a memory downcycle as early as the first half of 2027. Near-term earnings are still cushioned by long-term supply deals and customer prepayments. Monday's buying suggests some investors view the slump as exaggerated.

China's decision to continue its suspension of a 24% additional tariff on US goods, while keeping a 10% levy from November 10, created a risk-positive setting. The original one-year pause was due to expire this week. The rollover removes the immediate risk of a tariff snapback before next week's APEC summit in China, where Trump is expected to meet Xi Jinping and Vladimir Putin.

Nvidia and AI: the real test comes tonight

Asia's resilience sets up a more pronounced test when Wall Street opens. Nvidia CEO Jensen Huang told staff in a message about a romantic relationship with Alice Huang, a Megaspeed executive. US officials reportedly think she was recruited by Chinese intelligence. Nvidia's board launched an independent investigation. It stated it has no reason to believe national security or company secrets were breached, and Huang stays on as CEO. Tonight's session is the first full trading opportunity for the stock on the admission.

Trump portrayed Huang in a positive light, calling him honorable and praising his work for the country. He stated the two had not talked over the allegations and that he would take Huang on the trip to Asia, adding that circumstances are unpredictable. Whether Huang travels will be interpreted as a measure of his standing on chip policy.

Wider queries over AI persist. Reserve Bank of Australia Assistant Governor Sarah Hunter cautioned some asset prices could face sharp repricing or even disorderly adjustments if AI investment returns disappoint. She noted limited evidence so far that AI has lifted productivity. Her remarks add a central bank voice to worries about the scale of AI spending and the off-balance-sheet commitments funding it.

Oil: crosscurrents leave crude flat

Crude spent the day shifting between diplomacy and escalation. Prices dropped at the open after Trump told CNN it was "highly unlikely" the US would need to resume strikes on Iran, provided talks on Tehran's nuclear program and reopening the Strait of Hormuz advanced. Brent fell to near $96.70 and WTI briefly went under $90.

The selling was short-lived. Secretary of State Marco Rubio said talks with Iran were not productive and that Tehran's demands were simply unacceptable, adding a diplomatic solution is sometimes not possible. Reports of ongoing strikes in the Strait of Hormuz also capped the downside. Brent rebounded to around $98, finishing roughly flat, and WTI edged up to near $91.

Events over the weekend highlighted the escalation risk. A suspected Iranian drone strike halted output at Iraq's Khor Mor gas field, knocking out nearly 2.8 gigawatts of power in the Kurdistan region, in what seems a notable escalation. Yemen's Houthi movement hit the Aramco Tower in Riyadh and claimed attacks on Aramco oil storage, pulling the world's largest crude exporter deeper into the conflict. Washington is tightening the squeeze as well. US Central Command launched Task Force Iron Gate to target Iran's economy.

Diplomacy continues. Mediating country Qatar rejected reports that talks had broken down and stated both sides are still working toward a deal. Iran has reportedly sent a conditional nuclear proposal via Qatar that includes demands for sanctions relief. Trump meets the Qatari prime minister at 12:00 US Eastern, 17:00 GMT, to discuss a new ceasefire and resuming nuclear negotiations, Axios reported. This makes the meeting the next major marker for crude.

China: factory prices surge, consumers lag

October inflation data from China revealed a widening gap between producer and consumer prices. The producer price index climbed 5.7% from a year earlier, its largest increase since 2022 and well above the 5.3% predicted, as energy costs were fed through. Consumer prices rose just 0.7%, below the 0.8% expected. Core inflation eased to 0.8% from 1%. This mix implies manufacturers are absorbing cost increases amid weak domestic demand, squeezing industrial margins.

Beijing is also acting to bolster its stock market. A State Council meeting recently called for stronger capital market stabilisation mechanisms, according to the Securities Times. The focus is shifting to making existing support measures work.

FX: yen intervention data, kiwi firms on election

The yen traded with minimal change. USD/JPY held near 158.30. Ministry of Finance data confirmed Japan spent a record $50 billion on a single day, July 30, to support the yen. This was part of roughly $97 billion across July and August, including the first joint intervention with the US since 1998. The numbers underscore Tokyo's willingness to act. However, the yen remains soft as expectations of further Federal Reserve rate hikes keep the US-Japan rate gap wide. BOJ Governor Kazuo Ueda stated on Friday he sees some upside risks to inflation as energy costs feed through to consumer prices.

The New Zealand dollar was among the better performers, rising around 0.7% to near 0.5585. This came after a knife-edge election left Prime Minister Christopher Luxon's coalition with a paper-thin majority. Roughly 400,000 special votes are still to be counted, with final results expected by November 27. The Australian dollar added about 0.3% to around 0.6890, helped by the firmer risk tone and the China tariff announcement. EUR/USD inched up to around 1.1150.

Gold firms, bitcoin lags

Gold climbed roughly 1.3% to near $4,130 an ounce, bouncing from earlier weakness despite crude's own rebound. The advance faces a headwind from expectations of a December Fed rate increase. Traders price around an 80% chance after strong US payrolls. Goldman Sachs cut its gold forecasts to $4,150 for end-2026 and $4,800 for end-2027, citing the hawkish Fed. It stays constructive on the longer-term view thanks to heavy central bank purchases.

Bitcoin was the weak spot, slipping about 1.3% to just below $75,000 after touching a low near $74,500, trailing the equity recovery.

Ahead

Focus turns to the US session and Nvidia's first trading since Huang's admission, followed by Trump's meeting with the Qatari prime minister. Tuesday brings the US October CPI, a crucial input for December Fed hike expectations, and China's October trade figures. Next week's APEC summit is the next major test for both US-China relations and Iran diplomacy.