Asian stocks eye rebound as oil slide offsets chip rout

Asian markets were poised for a partial recovery on Wednesday as a multi-day slide in oil prices lifted sentiment among investors battered by a brutal selloff in semiconductor stocks, while caution prevailed ahead of the Federal Reserve's rate decision and a wave of major tech earnings.

Oil Decline Eases Pressure

Crude prices extended their retreat on Tuesday after the United States and Iran maintained a pause in hostilities following a 13-day U.S. bombing campaign, raising cautious hopes for a diplomatic resolution to the conflict that has disrupted Middle East energy flows. Brent crude futures fell more than 2% to around $86.52 a barrel, while U.S. West Texas Intermediate dropped 2.3% to $80.71, according to CNBC. President Donald Trump said there was a "good chance" of reaching a deal with Tehran, though Iranian officials denied direct negotiations were taking place.reuters+2

The decline in oil — which has fallen sharply since Sunday — helped ease inflation concerns and supported government bonds, with the U.S. 10-year Treasury yield dipping to around 4.63%. For oil-sensitive economies across Asia, the pullback offered a reprieve from months of elevated energy costs that had clouded the growth outlook.features.financialjuice+1

Chip Selloff Leaves Scars

The optimism from cheaper oil was tempered by continued fallout from a global semiconductor rout. South Korea's Kospi plunged 10% on Tuesday — triggering two circuit-breaker halts on the Korea Exchange — as Samsung Electronics and SK Hynix both tumbled more than 11%. Japan's Nikkei 225 dropped 4%, while the Nasdaq 100 futures pointed to continued pressure on U.S. tech names.reuters+2

The selloff was driven by mounting doubts over the returns from massive AI spending and signs of progress in China's advanced chipmaking capabilities. Nvidia ↗ 0.25% fell 5% on Monday, extending a broader decline in a key U.S. chip index for a third consecutive session.features.financialjuice+1

Fed Decision and Earnings Loom

Investors now face a packed Wednesday. The Federal Reserve is set to announce its rate decision at 2 p.m. ET, with economists broadly expecting the central bank to hold its benchmark rate steady at 3.5% to 3.75% for a fifth consecutive meeting. Fed Chair Kevin Warsh's post-decision press conference will be scrutinized for any shift in tone given the recent geopolitical turbulence and its inflationary implications.kiplinger+1

A slate of major tech earnings reports is also due after the close, adding another layer of uncertainty for markets already grappling with the divergence between oil-sensitive stocks and AI-linked assets.kiplinger