Asian Stocks Rebound as AI Sector Stabilizes After Midterm Election Jitters

Investors in Asia and the United States saw a relief rally on Monday, with major indices rising after a volatile week tied to midterm election results. The recovery in artificial intelligence (AI) stocks helped stabilize global markets following steep losses earlier in the week.

Taiwan’s Taiex index posted the strongest regional performance, jumping 4.9%. The surge was driven by TSMC, the major computer chipmaker, whose shares climbed 4.7%. This rebound mirrored gains in U.S. tech stocks on Friday, when AI shares recovered some ground lost to concerns that Democratic victories might slow data center construction.

Voters across party lines expressed wariness toward AI and rising power bills associated with new data centers, particularly in Texas. These political shifts prompted the initial sell-off. By Monday, however, the panic had subsided, allowing regional tech stocks to regain value.

In Japan, the Nikkei 225 index closed 2.3% higher at 58,775.50. Tokyo Electron, a chip equipment manufacturer, gained 2.8%, while Advantest rose 1.3%. Conversely, SoftBank Group shares fell 4.2% as the company worked to salvage a $5.4 billion robotics deal with ABB after Chinese regulators rejected the transaction.

South Korean markets showed a more muted response. The Kospi index fell 0.8% to 5,018.85 after rising in the morning. Samsung Electronics gained 0.6%, and SK Hynix rose 0.4%. These modest moves reflect the recent volatility in AI-related shares as investors traded positions rapidly.

Other Asian markets saw small gains. Hong Kong’s Hang Seng index edged up 0.1% to 24,507.83, while the Shanghai Composite added 0.3% to 3,660.79. Australia’s S&P/ASX 200 rose 0.1% to 9,029.70. U.S. futures also pointed to a positive start, with the S&P 500 up 0.3% and the Dow Jones Industrial Average gaining 0.6%.

Nvidia, a central player in the AI race, announced Sunday it is investigating reports that CEO Jensen Huang was the target of a foreign intelligence effort. The move follows Huang’s acknowledgment that he had an intimate relationship with a business executive whom U.S. intelligence linked to information gathering for Beijing. Stephen Innes of SPI Asset Management noted that the scrutiny touches the intersection of U.S. technology leadership and national security.

Despite the recent turbulence, the S&P 500 remains only 5.7% below its all-time high set last month. A report released Friday indicated U.S. employers hired more workers than expected, signaling a resilient economy. In currency markets, the U.S. dollar slipped to 158.16 Japanese yen, while Brent crude oil fell 1.8% to $96.60 per barrel.