Tech Stocks Surge Amid Interest Rate Cut Hopes

Asian markets rallied as expectations grow for a Federal Reserve interest rate cut in December, causing a surge in technology stocks. The rally follows a period of market volatility and comes amid geopolitical tensions and upcoming U.S.-China diplomatic talks. Meanwhile, commodities and currency markets showed mixed signals.

Asian share markets rallied on Tuesday as anticipation mounted for a December interest rate cut by the Federal Reserve, fueling a strong surge in technology stocks. Investors largely dismissed concerns that the tech sector might be overheating, leading to a notable market upswing.

MSCI's broadest index of Asia-Pacific shares outside Japan increased by 1%, recovering some of last week's 4% loss, driven by tech stocks. This uptick follows a significant market downturn amid risk-averse sentiment. In a statement, Charlie Aitken of Regal Partners noted, 'This is classic bull equity market behavior' as the market turns and recovers.

The growing likelihood of a U.S. rate cut is further supported by remarks from Fed Governor Christopher Waller, indicating a weak job market could justify another rate decrease. This prospect has led to a surge in rate cutting bets, affecting currency dynamics such as a slight dip in the U.S. dollar, amid continuing geopolitical conversations on U.S.-China relations.

(With inputs from agencies.)