The US stock market is not the sole market that has experienced a resurgence to unprecedented levels. Recent trading sessions have seen stock indexes in Taiwan, South Korea, and Japan achieve new records, recovering from declines experienced in March. Asian nations exhibit a significant dependence on oil imports from the Middle East, a situation that has largely stagnated since the onset of the Iran war. However, the impact on their economies has not prevented their stock markets from experiencing significant gains in recent weeks. On Wednesday, South Korea’s benchmark Kospi index and Taiwan’s Taiex index both reached unprecedented levels. Japan’s benchmark index reached an unprecedented peak last week. Meanwhile, the S&P 500 and Nasdaq Composite in the US both achieved record highs on Wednesday. The optimism observed in Asian and US markets can be attributed primarily to the worldwide surge in artificial intelligence advancements. The rally driven by AI has eclipsed certain risks associated with the conflict involving Iran. The demand for semiconductor chips has surged due to the concerted efforts to establish AI infrastructure, resulting in significant advantages for markets in Asia. In contrast, markets in regions with lesser exposure to AI, such as Europe, have not experienced similar gains. “Different regions have different potential tailwinds, but like the US, much of Asia is poised to benefit from the AI capex cycle,” stated Daniel Skelly. The United States stands as a net-energy exporter, in contrast to nations such as Japan and South Korea, which are classified as net-energy importers.
Consequently, Asian economies have experienced a greater impact from elevated oil prices. In the markets, the enthusiasm surrounding AI is propelling stock prices upward, even in the face of apprehensions regarding escalating energy expenses and possible adverse effects on consumer expenditure and overall economic expansion. South Korea stands as a prominent player in the semiconductor chip industry, evidenced by a remarkable performance in its stock market: The Kospi experienced a substantial increase of nearly 76% in 2025, marking its most successful year since 1999, and has already risen by 75% in the current year. On Thursday, the surge propelled the Korean equity market beyond Canada’s, establishing it as the seventh largest globally. Samsung Electronics experienced a significant increase this week, surpassing $1 trillion in market value. This achievement positions it as the second Asian company, following Taiwan Semiconductor Manufacturing Company, to reach this milestone. Meanwhile, Taiwan’s Taiex has experienced a 16% increase since the onset of the conflict. The Taiex has experienced a 42% increase this year. Taiwan in April ascended to become the sixth-largest stock market globally, eclipsing the market of Canada in the process. “Asian markets are reacting well to the latest peace efforts and the chipmaker momentum,” stated Jim Reid.
The Strait of Hormuz was effectively closed at the beginning of March, thereby constricting a fifth of the global oil supply. Japan’s Nikkei 225 experienced a rapid decline of 13% by March 31. However, the index experienced a significant rebound, mirroring the performance of US stocks, thereby eliminating its war-related losses and achieving a record high on April 16. The Nikkei has increased by 1% since the onset of the conflict with Iran and has risen by 18% year-to-date. Investors have embraced a sense of optimism regarding a resolution to hostilities; however, the rapid market rally also highlights the importance of the global surge in AI advancements. According to JPMorgan Chase, artificial intelligence, semiconductor firms, and data center-related enterprises constitute approximately 50% of the weight of Japan’s Nikkei 225. “Investors have returned to the familiarity of sectors where earnings are being realized, and where are those earnings being realized?” Arun Sai stated “It’s US tech, it’s the AI ecosystem.” As Asian markets persist in reaching new heights, European markets continue to lag behind their pre-Iran war benchmarks. Like Asia, Europe relies on the Middle East for its oil supply.
However, Europe has a lower concentration of tech and AI-focused companies in comparison to the United States and Asia. This is a contributing factor to why the markets in the region have not yet returned to their previous record highs. Germany’s Dax remains down over 1% since the onset of the conflict and is approximately unchanged year-to-date. Europe’s benchmark index has declined by nearly 2% since the onset of the conflict, although it has increased by 5% year-to-date. In the interim, nations in South America that export energy have experienced an uplift due to the increase in oil prices. Brazil’s Bovespa Index has remained relatively stable since the onset of the conflict with Iran, yet it has experienced a 16% increase year-to-date. “Asia lacks energy resources, yet it possesses advanced AI capabilities.” Latin America lacks AI capabilities, yet it possesses abundant energy resources. “Europe doesn’t have much of either,” stated David Russell.