AI trade outlook brightens on falling oil and Meta’s Muse agent ahead of Xi-Trump meeting

Nasdaq-100 hits record high while chip stocks in China and South Korea rebound, with investors betting that AI earnings can weather higher interest rates

The global AI trade is staging a comeback, as a confluence of falling oil prices, Meta Platforms’ launch of a new agentic tool, and anticipation surrounding the China-US leadership summit reignite interest in technology stocks.

The Nasdaq-100 Index hit an all-time high on Tuesday, surpassing the previous record set in June. In Asia, China’s chip-heavy Star Market 50 Index and South Korea’s Kospi gauge, which is heavily weighted towards memory chipmakers, have been bouncing back since July sell-offs.

The shift appears to mark a reversal in negative sentiment surrounding artificial intelligence stocks, which had been battered by inflationary fears and calls from some US tech companies to slow the development of new AI models due to safety concerns. Market sentiment pivoted as oil’s retreat below US$100 a barrel eased inflationary pressure and as Meta’s Muse agent reinforced demand across the AI supply chains.

Meanwhile, positive rhetoric from a preparatory trade talk before the sit-down between President Xi Jinping and US President Donald Trump has fuelled optimism for a de-escalation of geopolitical tensions.