Tech stocks rebound strongly, Nasdaq futures up 0.7%, yen under pressure, Brent oil down 2% intraday.

The strong rebound in tech stocks, combined with a continued drop in oil prices, has boosted global market sentiment. The S&P 500 index is expected to close higher for the week, marking a positive end to a tumultuous trading week.

Nvidia’s optimistic earnings outlook drove chip stocks to rebound further, with Nasdaq 100 futures up 0.7% and S&P 500 futures up 0.4%. Asian markets followed suit, with South Korea’s Kospi soaring 2.7%, leading gains in the region. In contrast, Europe’s Stoxx 600 index, which has less exposure to AI-related stocks, fell 0.3%.

This week saw a significant market turnaround: the Federal Reserve’s rate hike action reinforced its inflation-fighting credibility; concerns over Middle Eastern oil supply eased; and the ongoing supply-demand imbalance in semiconductors continued to support profitability expectations for chipmakers. Brent crude fell for a third straight day, approaching $102 per barrel; gold climbed to around $4,400 per ounce. On Friday, the Bank of Japan raised its benchmark rate as expected, while USD/JPY rose 1% intraday to 157.53. BOJ Governor Kazuo Ueda said it is difficult to judge whether financial conditions are excessively loose.

The market also faces additional volatility from “triple witching” on Friday—when derivatives contracts tied to individual stocks, index options, and futures all expire on the same day. According to Pepperstone Group strategist Dilin Wu, the notional value of options expiring today exceeds $2 trillion. Historical data shows the S&P 500 is more likely to close lower on triple witching days than average.

• Nasdaq 100 futures up 0.7%, S&P 500 futures up 0.4%.
• Euro Stoxx 50 opened down 0.2%, Germany’s DAX fell 0.4%, UK’s FTSE 100 down 0.2%, France’s CAC 40 down 0.4%.

• Nikkei 225 closed up 1.4% at 65,018.95. Topix closed down 0.1% at 4,091.14. Korea’s Seoul Composite closed up 2.7% at 6,894.23.

• USD/JPY rose 1% intraday to 157.53. BOJ Governor Kazuo Ueda said it is difficult to judge whether financial conditions are too loose.
• Euro rose 0.1% to $1.1488
• US 10-year Treasury yield little changed at 4.94%
• Japan’s 30-year government bond futures erased earlier gains, 20-year yield at 3.835%, 10-year yield narrowed its drop to about 1.5 basis points
• Brent crude fell 2.0% intraday, at $97.92 per barrel.
• Spot gold rose 0.5%, at $4,362.87 per ounce
• Bitcoin rose 1.2%, at $77,426.01

At the start of the week, multiple pressures hit markets simultaneously—Brent crude prices reached a four-month high, the US 10-year Treasury yield surged to a near 19-year high, while persistent fears over artificial intelligence potentially posing “existential risks” continued to weigh on chip stocks.

However, with various risk factors gradually easing, the market saw a significant recovery as the week progressed. The Federal Reserve delivered a rate hike, reinforcing its policy stance against inflation; geopolitical premiums on oil supply receded; and Nvidia’s optimistic outlook reignited investor confidence in semiconductor sector profitability. The structural supply-demand imbalance in the chip industry is unlikely to reverse in the short term, continuing to support earnings growth for relevant companies.

The non-unanimous voting outcome of the rate hike decision became a focus for markets. Bloomberg strategist Mark Cranfield noted, “USD/JPY rose after the BOJ hiked by 1.25% as expected, but the presence of dissenting votes will make another hike in October more difficult.”

Several strategists pointed out that if investors conclude the BOJ’s tightening pace cannot keep up with the Fed’s, USD/JPY could climb further toward 160. Since this 25 basis point hike was largely priced in, if subsequent policy communication is interpreted as dovish, further downside risk looms for the yen.

Earlier this month, expectations for a faster BOJ tightening, unwinding of yen carry trades, and anticipation of Japanese pension funds boosting domestic allocations drove a strong yen rally. However, the Fed’s hawkish hike this week reversed that move.

In Japan’s bond market, after the rate hike announcement, 30-year JGB futures erased prior gains, 20-year yield was at 3.835%, 10-year yield narrowed its decline to about 1.5 basis points, and two-year yield fell 2.5 basis points to 1.835%.

The previous day’s Wall Street rally set a positive tone for Asian markets—with the S&P 500 and Nasdaq 100 both recording their largest single-day gains since early August, driving the MSCI Asia equities index up 0.8%.

Nvidia’s upbeat outlook spurred a region-wide semiconductor stock rally, with SK hynix surging 5% intraday and Samsung Electronics gaining. US equity futures indicate Wall Street is likely to extend gains, while European shares are expected to open slightly lower.

Gold extended its rally, currently trading around $4,360 an ounce, having already risen nearly 2% on Thursday, reclaiming nearly all of its earlier weekly losses.

Friday’s market is also dealing with extra volatility from the “triple witching” event—expiration of derivatives contracts linked to individual stocks, index options, and futures on the same day.

According to Pepperstone Group strategist Dilin Wu, today’s expiring options have a notional value over $2 trillion. Historical data shows the S&P 500 is more likely to close lower on triple witching days. She also noted that Thursday’s buying may have partly stemmed from bulls advancing key technical levels to secure favorable positions—“whether the rally continues after expiry is today’s key question.”

Nick Twidale, Chief Market Analyst at AT Global Markets, also commented, “With central bank policy still dominating markets and ongoing geopolitical risks, there should be plenty of room for volatility to play out for the remainder of the week.”