AI trade outlook brightens on falling oil and Meta’s Muse agent a

The Nasdaq-100 Index rose to an all-time high on Tuesday, clearing its previous record from June as interest in the global AI trade returned across major technology markets.

AI sentiment turns after recent pressure

The rebound comes after artificial intelligence stocks had been hit by inflation worries and by calls from some US technology companies to slow the development of new AI models over safety concerns.

The latest shift appears to mark a reversal in that negative sentiment, with technology stocks drawing renewed attention from investors.

Investors are betting that AI earnings can withstand higher interest rates, even after earlier pressure on the sector.

Falling oil eases inflation concerns

Market sentiment changed as oil retreated below US$100 a barrel, easing inflationary pressure that had weighed on AI and technology shares.

The fall in oil prices formed part of a broader set of factors helping the global AI trade stage a comeback.

Meta Platforms’ launch of a new agentic tool also contributed to the renewed focus on the sector.

Meta’s Muse agent reinforced demand across AI supply chains, adding to the positive turn in market sentiment.

Asian chip gauges recover

In Asia, China’s chip-heavy Star Market 50 Index has been bouncing back since July sell-offs.

South Korea’s Kospi gauge, which is heavily weighted towards memory chipmakers, has also been recovering since the July sell-offs.

Those moves suggest that the rebound is not limited to US technology shares, but is also visible in markets closely linked to chip and memory demand.

Xi-Trump talks add to optimism

Optimism has also been supported by positive rhetoric from a preparatory trade talk before the sit-down between President Xi Jinping and US President Donald Trump.

That rhetoric has fuelled expectations for a de-escalation of geopolitical tensions, adding another supportive factor for technology and AI-related markets.

Source: South China Morning Post