Global markets ride the AI mood swing

AI mood swing

Asia walked in this morning with a simple message: when Wall Street ricochets, you either duck or you buy the momentum. Today, they bought it hand over fist.

The rebound in U.S. equities washed straight across the Pacific. The schizophrenic tape around AI has become an accepted reality. In one session, it is an extinction-level disruption; in the next, it is orchestration and integration. Traders have stopped arguing theology and started trading momentum. Asian equity markets leaned into the relief momentum.

The real driver of the bounce was not blind optimism. It was the realization that the AI displacement narrative had sprinted too far ahead of the compute runway. The catastrophe scenarios around white-collar employment look cinematic, but silicon does not scale on sentiment alone. Compute constraints remain real. Hallucination rates remain elevated. And history is littered with technological forecasts that promised straight-line revolutions and delivered uneven evolution instead.

Autonomous driving was meant to conquer highways a decade ago. Victorian doctors once warned train travel would fracture the human psyche. Innovation disrupts, but it rarely detonates the entire economic order overnight.

Anthropic’s enterprise positioning reinforces that point. The large model providers are shaping up to be orchestration layers sitting on top of entrenched software stacks, not wrecking balls swinging through them. Claude is only as useful as the data it can plug into. That is not replacement. That is augmentation. The market is slowly relearning that nuance.

This matters because software multiples had begun to price in displacement as a base case. When risk is over-embedded in valuations, the absence of apocalypse becomes incrementally bullish. That is what we are seeing now.

There are still cross-currents. Development costs could compress. The interaction layer could flatten switching costs. The control plane for agentic AI will become competitive terrain. But the infrastructure and computing complex remains the toll booth on this highway. As long as capex flows, someone is collecting rent.

Which is why North Asia looks so comfortable. South Korea, Taiwan and Japan are not debating whether AI destroys jobs. They are shipping the equipment that powers it. Capex is their earnings. The Kospi is up nearly 5 percent this week and 44 percent year to date. Taiwan is printing similar momentum. The Nikkei has climbed 15 percent in 2026 and is enjoying a full narrative re-rating around governance and earnings.

There is an underappreciated flow story here. Japanese investors sit on roughly $2.25 trillion in foreign equities. Even a modest repatriation would be oxygen for both the Nikkei and the yen. That is latent fuel, not yet fully ignited.

Hovering above all of this is Nvidia. The market’s gravitational center. Forecasts call for profit growth north of 60 percent and revenue growth approaching 70 percent. Guidance is expected to point to roughly $72 billion in first-quarter revenue. NVIDIA has beaten sales expectations for 13 consecutive quarters. In this tape, meeting estimates is table stakes. The size of the beat is the trade.

Options imply a roughly 4.8 percent move. That sounds tame until you remember 4.8 percent on a $4.7 trillion market cap equates to about $226 billion in value. That is larger than the annual GDP of many nations. NVIDIA is no longer a stock. It is a macro event.

Overlaying this is tariff theatre that would make even seasoned policymakers dizzy. The Supreme Court strikes down much of the tariff regime. A temporary 10 percent global tariff is signed. It is lifted to 15 percent. It is lowered back to 10 percent. It may go back to 15 percent.

Confusion is rational. European and Japanese officials are trying to determine whether last year’s trade deals still stand. Markets are left to price not just policy, but the probability distribution of policy reversal. The tape hates uncertainty more than it hates bad news.

The State of the Union offered little clarity. AI barely featured. Instead, a “rate payer protection pledge” surfaced, suggesting technology firms may need to build their own power generation for data centers. The mechanics remain opaque. Markets largely shrugged. They usually do during these speeches.

Oil dipped modestly when diplomacy with Iran was mentioned as a preference. Yet the military buildup in the region tempers that optimism. Energy traders are pricing rhetoric against hardware. For now, the move is incremental, not structural.

So Asia closes the AI scare loop with a pragmatic shrug. AI panic has been dialled back from existential to cyclical. Tariff policy remains a moving target. NVIDIA sits at the center of gravity. Japan carries an underowned domestic equity story.

The tape is not pricing perfection. It is pricing elasticity. Elasticity in earnings. Elasticity in policy. Elasticity in narrative. And in a market where mood swings are inevitable, elasticity is the only constant traders can anchor to.