Markets surged with AI tech leading Wall Street gains, while investors watch US economic data for clues on Federal Reserve moves

Global financial markets surged on Tuesday, led by a strong rally in AI-linked technology stocks on Wall Street, as investors reacted positively to robust earnings prospects and liquidity signals.

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The Dow Jones Industrial Average closed at a record high, while the S&P 500 and Nasdaq also posted gains, supported by data showing US manufacturing contracted for the tenth consecutive month in December.

The surge came despite heightened geopolitical tensions following the surprise US raid on Caracas over the weekend, which saw Venezuelan President Nicolas Maduro and his wife transported to New York to face drug charges.

Analysts noted that global equities largely ignored the event, as markets have become accustomed to geopolitical volatility unless it threatens the wider supply chain or financial conditions.

Charu Chanana, chief investment strategist at Saxo Markets, commented, “Equities can continue grinding higher if earnings expectations, liquidity, and rate expectations remain supportive, especially in tech.”

Tech giants Amazon and Meta led Wall Street gains, while energy majors also contributed to the positive momentum.

Traders are now turning attention to upcoming US employment figures, which could influence the Federal Reserve’s interest rate decisions ahead of its next meeting at the end of the month.

Asian markets followed Wall Street’s lead, with Hong Kong, Tokyo, Shanghai, Taipei, Singapore, and Jakarta climbing more than one per cent.

Seoul added over one per cent, topping 4,500 points for the first time, driven by strong rallies in chipmaker SK hynix and automotive firm Hyundai, which unveiled its AI-powered humanoid robot, Atlas, at the Consumer Electronics Show.

In Australia, BlueScope Steel’s shares jumped nearly 21 per cent after confirming it is evaluating a US$8.8 billion joint takeover bid. London’s FTSE 100, Paris’s CAC 40, and Frankfurt’s DAX opened higher following record gains the previous day.

Oil prices steadied after initial volatility linked to the Venezuelan political upheaval, with West Texas Intermediate down 0.6 per cent at $57.96 per barrel and Brent North Sea crude down 0.5 per cent at $61.44 per barrel.

Observers cautioned that Venezuela’s crude output remains constrained by ageing infrastructure, low prices, and political uncertainty, limiting its impact on global oil supply.

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The rally underscores sustained investor optimism in AI technology and the broader equity market despite geopolitical shocks, positioning global markets for a potentially strong start to 2026.