Asian equity markets were broadly higher on Tuesday, following a renewed advance in U.S. stocks. Investors appear to be accepting swings in sentiment around artificial intelligence as part of the market backdrop for now.
Currency and commodity moves were modest. The dollar retreated a little, benchmark Treasury yields were a touch firmer and oil was trading up roughly 0.6%.
Regional technology exporters - notably in South Korea, Taiwan and Japan - are benefiting from strong investment in the capital equipment that powers AI workloads. For those economies, elevated capital expenditure translates directly into stronger earnings for the companies that manufacture servers, chips and related hardware.
The Kospi is trading at a fresh record and is up almost 5% so far this week, lifting its gains for 2026 to 44%. Taiwan's market has risen about 5% this week and is approaching a 22% advance for the year to date. The Nasdaq, by comparison, remains a prominent reference point for AI-driven market moves.
Japan's Nikkei has climbed roughly 15% in 2026 and has attracted favourable commentary from analysts who are calling for a re-rating of corporate Japan based on improved earnings and governance. Deutsche Bank observes that Japanese investors hold approximately $2.25 trillion in foreign equities; even a modest reallocation back into domestic shares could materially benefit the Nikkei and the yen.
Much of the immediate market focus is on Nvidia, which is due to report results later in the day. According to LSEG data, analysts expect profit growth of about 62% for the quarter ending in January and revenue to increase by around 68%. For the first quarter, revenue guidance is forecast to point to an approximate 64% rise to $72 billion.
Nvidia has beaten sales forecasts for 13 consecutive quarters, making the magnitude of any upside particularly important. The market appears to set a de facto threshold, with a $2 billion beat on both fourth-quarter and first-quarter guidance described as a minimum in current expectations.
Options markets are pricing an implied post-results move of about plus or minus 4.8% in the shares - a magnitude that, while significant in absolute dollar terms, is smaller than some prior reaction ranges given Nvidia's enlarged market value. A 4.8% swing corresponds to roughly $226 billion of market value. Nvidia's total market capitalization is about $4.7 trillion, a figure larger than the annual GDP of either Japan or India.
AI was only a brief topic during President Trump's State of the Union address, which included what was described as a "rate-payer protection pledge". That pledge was outlined as a requirement for large technology firms to build their own power plants for their data centres. The speech did not explain the mechanics of such a policy or how it would be enforced.
Oil prices appeared to soften slightly when the president said his "preference" was to resolve nuclear issues with Iran "diplomatically", though that comment sits alongside what was described as a substantial U.S. military build-up in the region. Otherwise, market reaction to the State of the Union was limited, consistent with typical responses to such speeches.
Key near-term items that could move markets on Wednesday include:
- Nvidia quarterly results.
- German and French consumer confidence readings and final euro zone CPI data.
- Public remarks by policy officials: Governor of the Riksbank Erik Thedéen, Governor of Norges Bank Ida Wolden, ECB Board Member Pedro Machado, and Federal Reserve presidents Thomas Barkin, Jeffrey Schmid and Alberto Musalem.
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Investors considering Nvidia should weigh expectations embedded in current estimates and the degree of upside required to materially change the stock's valuation, given its already substantial market capitalization.