Asian stocks rallied sharply on Wednesday, with South Korea's Kospi surging more than 5% in early trading and Japan's Nikkei 225 adding nearly 2%. Chipmakers led the gains for a second consecutive session, driving a broad recovery across the region.
Chipmakers Fuel the Rebound
Samsung Electronics and SK Hynix were at the forefront of the rally, pushing the Kospi to a high of 7,164. The Nikkei 225 reached 67,524.22. A key semiconductor gauge jumped 5.2% on Tuesday, signaling renewed investor appetite for the sector after weeks of selling.
Recovery from a Rough Month
Wednesday's gains build on Tuesday's rebound, when the Kospi rose 3.6% and the Nikkei added 3%. But the Kospi remains more than 20% lower over the past month, despite being up over 50% year-to-date. Investors had been locking in profits on concerns that the artificial intelligence boom had inflated stock prices too far, too fast.
Earnings Season Adds to the Uncertainty
Nearly 20% of S&P 500 companies by market value are set to report earnings this week, including tech heavyweights Alphabet and Tesla on Wednesday. Their results could either reinforce the rally or reignite selling pressure. Analysts are split on whether the bounce will last, with many watching for signs that the AI trade still has room to run.
