Asian stocks cling to gains as US rebounds, oil rises

Chloe Harper July 22, 2026

SINGAPORE, July 22 (Reuters) – Stocks made lumpy gains on Wednesday as the boost from a strong Wall Street session was capped by caution ahead of earnings reports from Big Tech while threats from Houthi rebels to expand the Middle East conflict pushed up oil prices.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.2% as South Korea’s Kospi trimmed gains to 1.5%, well off an earlier advance of more than 6%.

Japan’s Nikkei 225 flitted between gains and losses, while S&P 500 e-mini futures slipped 0.2% alongside a 1.2% decline for stocks in Hong Kong.

Brent crude rose 1.3% to $92.22 a barrel after two oil tankers carrying Saudi crude to Asia reversed course in the Red Sea on Tuesday following threats of attack from Yemen’s Iran-aligned Houthis.

“Equity markets shrugged off geopolitical risks, focusing instead on tech sector returns,” Westpac analysts wrote in a research report. “After large losses in recent days, semiconductor stocks bounced back.”

Market focus will turn to earnings from Alphabet, which is facing heightened scrutiny over the delayed launch of a key AI model, and Tesla, which is widely expected to report its first quarterly cash burn in over two years.

“Earnings season will be an important test on whether the narrow group carrying the market can keep doing so at the pace expectations now require,” wrote Laura Cooper, global investment strategist and head of macro credit at Nuveen.

“The second half likely requires AI spending to translate into earnings growth across the market and proof that credit can absorb another wave of supply without spreads giving way.”

Pharmaceuticals stocks in India slumped 1.5% after U.S. President Donald Trump said all generic drugs brought into the United States will carry a tariff of 0% for two years from August 1, after which the rate will rise to 100% for one year and 200% thereafter.

The U.S. dollar index, which measures the greenback’s strength against six currencies, held near a one-week high at 101.14. Against the yen, the U.S. dollar was flat at 163.17 yen, after setting a four-decade high against the Japanese currency on Tuesday.

Japanese Finance Minister Satsuki Katayama said on Wednesday that the government remains ready to take “decisive action” in currency markets if needed, while refraining from commenting on specific foreign-exchange levels.

The battered yen and soaring oil prices pushed Japan’s imports to a record high in June, though exports also topped expectations, helped by booming demand from AI-related data centres – and a weak currency that continues to boost overseas sales.

The jump in oil prices, which settled at a five-week high on Tuesday, did little to unsettle bond and currency markets ahead of central bank meetings next week. Among them, the U.S. Federal Reserve is set to keep its key interest rate steady for the rest of 2026, according to the median forecast of economists in a Reuters poll, though they said the chance of a rate hike is high.

Fed funds futures indicate that though one hike by December is probable, a hike of 50 basis points or more by the end of the year is a coin toss, the CME Group’s FedWatch tool showed.

The yield on the U.S. 10-year Treasury bond was up 0.2 basis point at 4.628%. Gold was up 1.2% at $4,124.74.

In cryptocurrencies, bitcoin was down 0.5% at $66,077.16, while ether was flat at $1,923.25.