Asian technology stocks extended their rally on Wednesday as continued enthusiasm surrounding artificial intelligence outweighed growing concerns over escalating tensions in the Middle East. The MSCI Asia Pacific Index gained 0.4%, with technology stocks providing the biggest boost, while South Korea’s Kospi rose 1.3%, led by SK Hynix and Samsung Electronics.

The gains followed a 1.3% advance in the Philadelphia Semiconductor Index during US trading, reinforcing optimism around the technology sector and continued demand linked to artificial intelligence infrastructure. Separately, Google announced plans to invest €13 billion in Finland’s AI infrastructure during 2027–28, including three new data centers.

Oil prices moved sharply higher, with Brent crude jumping as much as 1.8% to $99.68 a barrel after the US struck Iranian tankers near Kharg Island. The move pushed oil toward $100 a barrel for the first time since July, with crude now up more than 60% this year.

The renewed attacks on energy infrastructure have increased concerns over further disruptions to shipments through the Strait of Hormuz. Investors are also assessing the potential inflationary consequences of higher energy prices, with Friday’s US inflation data expected to provide further clues on whether the latest oil surge could influence expectations for a Federal Reserve rate hike at its September 15–16 meeting.

The geopolitical situation remained tense across the region. Iran’s Islamic Revolutionary Guard Corps said it had attacked two US ships and eight oil tankers in the Gulf in response to a US strike on five Iranian tankers, according to state media. US forces had earlier destroyed five Iranian tankers carrying crude oil following two attempts to hit a US Navy warship with ballistic missiles.

The developments pushed Brent crude closer to $100 a barrel and raised concerns over deeper disruptions through the Strait of Hormuz. Meanwhile, Russian air strikes were reported to have damaged port facilities in Ukraine’s Mykolayiv.

The Yen continued to strengthen, rising 0.4% to 153.40 per Dollar and extending its winning streak to three days. US Treasury Secretary Scott Bessent continued to push for a stronger Japanese currency, while the Dollar weakened 0.1%. The 10-year Treasury yield rose one basis point to 4.80%.

Bessent also challenged traders to counter his efforts to strengthen the Yen, saying that when he makes market calls these days, he is effectively doing so with inside information.

Trade tensions also remained in focus. The US moved to ban certain Canadian alcoholic beverages, dairy products, and motorcycles, while the White House said certain Canadian alcoholic drinks will be barred from US imports from 12:01 a.m. ET on September 29, 2026. President Trump also signed a proclamation altering the scope of Canadian goods subject to additional motor vehicle tariffs.

Canadian Prime Minister Mark Carney said he does not believe in escalating the trade war with the US, but argued that retaliation against the latest US tariffs was necessary while warning Canadians to prepare for turbulent times ahead.

Meanwhile, the European Union and Canada pursued a broader trade and security partnership aimed at counterbalancing the influence of the US and China.

China is also taking steps to increase demand for yuan assets in Hong Kong. The country plans to allow its $568 billion social security fund to purchase offshore bonds through an investment channel with Hong Kong, according to people familiar with the matter.

Elsewhere, Israel informed the British consulate in East Jerusalem that its diplomats will lose accreditation within 30 days, according to an Israeli official. In Taiwan, the top US diplomat said the island’s capacity to prevent conflict remains crucial to maintaining its political, economic, and social system, while an upcoming US-China summit was described as an opportunity to deepen strategic stability based on fairness and reciprocity.

Overall, Asian technology stocks continued to benefit from strong AI enthusiasm, while rising oil prices and escalating tensions around the Strait of Hormuz created a more challenging backdrop for inflation and interest-rate expectations. At the same time, currency developments involving Japan and renewed trade tensions between the US and Canada kept broader geopolitical and economic risks firmly in focus.

FISG Daily Market Wrap provides a concise view of the forces moving global markets, helping investors stay informed and better prepared for what comes next.

FISG — Interstellar Group