Asian stocks rally as AI trade regains momentum
Technology stocks booming again while Brent crude trades below $80 a barrel amid hopes for a Middle East interim deal Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. Technology sto
Asian shares moved higher as investors returned to the artificial intelligence trade, helping technology stocks recover from a recent sell-off. The rebound came even as markets digested setbacks tied to Elon Musk's SpaceX and US chipmaker AMD, underscoring how quickly sentiment can shift in the fast-moving AI sector.
The latest move in shares highlights a broader market message: enthusiasm for AI remains strong, but the scale of spending is drawing closer scrutiny. Goldman Sachs has estimated that US technology investment as a share of GDP has already moved above the peak reached in the late 1990s. The bank also says the largest cloud and computing groups are planning 2026 spending that is almost 50% higher than analysts expected six months ago.
Technology stocks lead the rebound
The recovery in technology shares helped lift global stock markets after a period of weakness. According to The Guardian Business live coverage, investors appear to have changed their view on AI in the near term, even though the underlying risks have not disappeared.
That tension between optimism and caution is central to the current market backdrop. Demand for AI infrastructure continues to support valuations, but the capital needed to build and maintain that growth is increasingly large. For investors, the question is not whether AI matters, but how much of the future is already priced in.
Oil prices ease below $80
Alongside the equity rally, oil prices also eased, with Brent crude trading below $80 a barrel. The move was linked to hopes for an interim deal in the Middle East, adding another signal that broader market risk sentiment had improved.
Lower oil prices can help calm inflation concerns and support equities, although the outlook remains sensitive to geopolitical developments. For now, traders are balancing stronger appetite for risk assets with the possibility of fresh shocks in energy markets.
A busy day for economic data
The business calendar also included a series of important data releases. The Guardian Business live blog noted Eurozone S&P Global services and composite PMIs for July at 9am BST, followed by UK services and composite PMIs at 9.30am BST. In the United States, the day was set to bring the ADP employment change for July at 1.15pm BST and the ISM services PMI for July at 3pm BST.
Those reports matter because services activity and labour market trends offer clues about the strength of the global economy. For markets, they can also shape expectations around interest rates and corporate earnings.
What investors are watching next
The current rally in Asian shares suggests that the AI trade still has powerful support, even after a shaky patch for some names connected to the sector. But the scale of planned investment means markets may remain volatile as investors reassess which companies can turn AI spending into lasting profit.
Oil prices, economic data and fresh signals from major technology groups are likely to keep influencing sentiment in the days ahead. For now, the message from markets is clear: the AI story is still driving trading decisions, but confidence is not unconditional.
FAQ
What is driving Asian shares higher?
Technology stocks are rebounding as investors return to the AI trade after a recent sell-off.
Why are oil prices relevant to markets?
Brent crude falling below $80 a barrel can ease inflation concerns and support risk appetite.
What does Goldman Sachs say about AI spending?
The bank says US technology investment as a share of GDP has already surpassed its late-1990s peak, and that major cloud and computing firms are planning far more 2026 spending than analysts expected six months ago.
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