Asian stocks gain after optimism about AI sends Wall Street higher

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TOKYO (AP) — Asian shares mostly rose in Wednesday morning trading, with Japan's benchmark hitting a record high, as investors were cheered by an overnight Wall Street rally that seemed to reflect optimism about the artificial-intelligence boom.

Japan's benchmark surged 1.3% to 58,081.62. That came despite China's move the previous day to restrict exports to 40 Japanese companies and organizations it says are contributing to Japan’s “remilitarization.”

The reaction was varied with the prices of some listed companies rising, like Subaru Corp. and Mitsubishi Materials Corp., while others slipped, including Eneos Corp. and Sumitomo Heavy Industries.

Analysts said the declining yen worked to boost export shares, such as Honda Motor Co. and Panasonic Corp. The U.S. dollar slipped to 155.78 Japanese yen from 155.83 yen. The dollar traded close to 160 yen levels several months ago. The euro cost $1.1784, up from $1.1779.

Australia's S&P/ASX 200 jumped 1.1% to 9,122.50. South Korea's Kospi surged 1.7% to 6,069.36. Hong Kong's Hang Seng rose 0.3% to 26,668.83, while the Shanghai Composite added 0.7% to 4,147.68.

Investors are also closely watching President Donald Trump's State of the Union address that's being delivered dayside for Asia. Trump hopes to convince increasingly wary Americans that the U.S. economy remains strong and his policies support the domestic job market and manufacturing.

On Wall Street, the S&P 500 climbed 0.8% Tuesday and recovered nearly three-quarters of its sharp drop from the day before. The Dow Jones Industrial Average added 370 points, or 0.8%, and the Nasdaq composite gained 1%.

Advanced Micro Devices helped lead the market and rallied 8.8% after announcing a multiyear deal where it will supply chips to Meta Platforms to help power its AI ambitions. Under the agreement, Meta also got the right to buy up to 160 million shares of AMD stock for 1 cent each, depending in part on how many chips Meta ultimately buys.

It’s a reminder of the excitement that built in recent years about the billions of dollars pouring into AI, producing a sharp turnaround from the prior day, when worries about the potential downsides of AI shook Wall Street. IBM rose 2.7% to recover some of its 13.1% drop from Monday, which was its worst since 2000.

On Tuesday, Anthropic unveiled new tools for businesses to use with its Claude AI assistant. They covered everything from human-resources work to engineering to investment banking.

The event suggested that fears about AI supplanting existing software, rather than merely making it easier to use, may be overblown, according to Dan Ives, an analyst at Wedbush.

“While these use cases are impressive, the reality is that these new AI tools will not rip and replace existing software ecosystems and data environments with these AI tools only as useful as the data it can reach,” he said.

Big U.S. companies continued to report mostly better profits for the end of 2025 than analysts expected. Keysight Technologies rallied 23.1% for the biggest gain in the S&P 500, while Home Depot rose 2% after likewise delivering stronger profit and revenue than analysts expected.

All told, the S&P 500 rose 52.32 points to 6,890.07. The Dow Jones Industrial Average added 370.44 to 49,174.50, and the Nasdaq composite climbed 236.41 to 22,863.68.

In the bond market, Treasury yields held relatively steady after a report said that confidence among U.S. consumers improved by more than economists expected. The yield on the 10-year Treasury held at 4.03%, where it was late Monday.

In energy trading, benchmark U.S. crude added 45 cents to $66.08 a barrel. Brent crude, the international standard, rose 47 cents to $71.24 a barrel.

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AP Business Writer Stan Choe contributed.

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Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama