Asian markets rise after US tech rally, Brazil stocks crash

Asian stock markets rose on Tuesday, following a strong performance by US technology shares on Monday. The rally in the United States helped erase most of the losses from the previous week. However, Brazilian stocks dropped sharply after President Luiz Inácio Lula da Silva won reelection. Investors worried the result would lead to higher government spending and increased pressure on national debt. The Bovespa stock index in Brazil fell roughly 14 percent.

In East Asia, South Korea’s Kospi index jumped more than 4 percent before settling 3.6 percent higher at 5,667.99. Chipmakers led the gains. SK Hynix rose 7 percent, and Samsung Electronics climbed 4.8 percent. Japan’s Nikkei 225 added 2.2 percent to reach 63,542.77. Advantest, a maker of testing equipment, surged more than 10 percent. SoftBank Group, which has invested in OpenAI, gained 7 percent.

Asian markets were mixed in other regions. Hong Kong’s Hang Seng index gave up early gains and slipped 0.2 percent to 23,174.44. The Shanghai Composite edged down 0.1 percent to 3,692.58. Traders watched closely for announcements from a high-level meeting of China's ruling Communist Party. Taiwan’s Taiex rose 0.5 percent, and Australia’s S&P/ASX 200 advanced 0.3 percent to 8,838.10.

In the United States, the S&P 500 rose 0.7 percent on Monday. The index recovered most of its previous week's losses and came within 1.8 percent of its all-time high. Nvidia led the market higher with a 2.4 percent gain. This helped the company recover some ground after three consecutive losing weeks. That streak was the longest for Nvidia since June. The Dow Jones Industrial Average added 0.3 percent, and the Nasdaq composite climbed 0.8 percent.

Volatility continued in the artificial intelligence sector. Meta Platforms shares fluctuated after the company announced plans to raise $35 billion through a stock sale to fund AI investments. Nvidia, Advanced Micro Devices, and Broadcom indicated they might buy a total of $5 billion in the offering. Anthropic provided details on its losses ahead of its first public stock sale. SpaceX, which also runs the xAI business, announced a roughly $40 billion deal with an Apollo Global Management entity to lease AI computing power.

Corporate earnings reports are expected to provide more clarity on AI spending. Alphabet and Microsoft will release their quarterly results on Wednesday. Amazon will follow on Thursday. Approximately one-third of all companies in the S&P 500 are scheduled to report earnings this week. These reports may show whether AI spending is generating the promised profits and productivity.

In the bond market, yields on longer-term US Treasurys fell. The yield on the 10-year Treasury eased to 4.98 percent from 5.00 percent on Friday. The two-year Treasury yield rose to 4.71 percent from 4.69 percent. Market participants expect the Federal Reserve to leave interest rates unchanged at its meeting on Wednesday. The Fed hiked rates last month for the first time in three years to combat high inflation. Oil prices declined, with Brent crude falling 0.8 percent to $109.82 a barrel. US benchmark crude dropped 0.8 percent to $100.93.