Technology stocks rebounded strongly, Nasdaq futures rose 0.7%, the yen came under pressure, and Brent crude oil fell 2% on the day.

A strong rebound in tech stocks coupled with continued low oil prices boosted global market sentiment, and the S&P 500 is poised to close higher this week, providing a positive ending to a volatile trading week.

Nvidia's optimistic earnings outlook fueled a further rebound in chip stocks, with Nasdaq 100 futures rising 0.7% and S&P 500 futures gaining 0.4%. Asian markets followed suit, with South Korea's KOSPI index surging 2.7%, leading the regional rally. In contrast, the European Stoxx 600 index, which has less exposure to AI-related stocks, fell 0.3%.

This week saw a significant market shift: the Federal Reserve's rate hikes solidified its credibility as an inflation fighter, concerns about Middle Eastern oil supply eased, and the continued supply-demand imbalance in the semiconductor sector supported chip company profit expectations. Brent crude oil prices fell for the third consecutive day, nearing $102 per barrel; gold rose to around $4,400 per ounce. The Bank of Japan raised its benchmark interest rate on Friday as expected, causing the dollar to rise 1% against the yen to 157.53. Bank of Japan Governor Kazuo Ueda stated that it was difficult to determine whether financial conditions were overly loose.

Friday also presents additional challenges for the market due to the "triple witching day"—derivative contracts linked to individual stocks, index options, and futures all expire on the same day. According to Pepperstone Group strategist Dilin Wu, the notional value of options expiring today exceeds $2 trillion. Historical data shows that the S&P 500 has a higher-than-average probability of closing lower on triple expiry days.

Nasdaq 100 futures rose 0.7%, and S&P 500 futures rose 0.4%.The Euro Stoxx 50 index opened down 0.2%, the German DAX index down 0.4%, the UK FTSE 100 index down 0.2%, and the French CAC 40 index down 0.4%.The Nikkei 225 index closed up 1.4% at 65,018.95 points. The Topix index closed down 0.1% at 4,091.14 points. The Seoul Composite Index closed up 2.7% at 6,894.23 points.The dollar rose 1% against the yen to 157.53 on the day. Bank of Japan Governor Kazuo Ueda said it was difficult to judge whether the financial environment was too loose.The euro rose 0.1% to $1.1488.The yield on the 10-year U.S. Treasury note remained largely unchanged at 4.94%.Japanese 30-year government bond futures erased earlier gains, the 20-year government bond yield stood at 3.835%, and the 10-year government bond yield narrowed its losses to about 1.5 basis points.Brent crude oil fell 2.0% on the day, closing at $97.92 per barrel.Spot gold rose 0.5% to $4,362.87 per ounce.Bitcoin rose 1.2% to $77,426.01.

This week's market rotation: from volatility to recovery

At the beginning of this week, multiple pressures hit the market simultaneously – Brent crude oil prices hit a four-month high, the 10-year US Treasury yield rose to its highest level in nearly 19 years, and at the same time, market concerns about the potential "existential risks" posed by artificial intelligence technology continued to suppress the performance of chip stocks.

However, as various risk factors gradually eased, the market completed a significant recovery within the week. The Federal Reserve's interest rate hike reinforced its policy stance against inflation; geopolitical premiums on the oil supply side declined; and Nvidia's optimistic business outlook reignited investor confidence in the semiconductor industry's profit prospects. The structural imbalance between supply and demand in the chip industry is unlikely to reverse in the short term, continuing to provide profit support for related companies.

Divergent voting weighs on the yen; strategists warn the exchange rate may weaken further.

The unanimous vote in this interest rate hike decision has become a focus of market attention. Bloomberg strategist Mark Cranfield stated, "The dollar rose against the yen after the Bank of Japan raised interest rates by 1.25% as expected, but the vote was divided, which will make another rate hike at the October meeting more difficult."

Several strategists pointed out that if investors believe the Bank of Japan's tightening pace cannot match that of the Federal Reserve, the USD/JPY exchange rate could rise further to around 160. Since the market has largely priced in the 25 basis point rate hike, the downside risks for the yen will be more pronounced if subsequent policy communications are interpreted as dovish.

Earlier this month, the yen experienced a strong rebound, driven by expectations of accelerated policy tightening by the Bank of Japan, the unwinding of yen carry trades, and anticipation that Japanese pension funds might increase their allocation to domestic assets. However, the Federal Reserve's hawkish rate hike this week subsequently reversed this upward trend.

In the Japanese government bond market, following the announcement of the interest rate hike, 30-year government bond futures erased previous gains, the 20-year government bond yield was 3.835%, the 10-year government bond yield narrowed its decline to about 1.5 basis points, and the two-year government bond yield fell 2.5 basis points to 1.835%.

Asian chip stocks rallied, and U.S. stock futures continued their upward trend.

The previous day's gains on Wall Street set a positive tone for Asian markets – the S&P 500 and Nasdaq 100 both posted their biggest one-day gains since early August, pushing the MSCI Asia Equity Index up 0.8%.

Nvidia's optimistic earnings outlook spurred a rally in semiconductor stocks across the region, with SK Hynix rising by 5% and Samsung Electronics also gaining. US stock index futures suggest Wall Street is poised to continue its upward trend, while European markets are expected to open slightly lower.

Gold extended its gains, currently trading at around $4,360 per ounce, after rising nearly 2% on Thursday, essentially erasing losses from the previous three trading days.

The "Triple Witching Day" adds uncertainty, and the risk of volatility should not be ignored.

Friday also saw additional disruptions from the "triple witching day"—derivative contracts linked to individual stocks, index options, and futures expired on the same day.

According to Pepperstone Group strategist Dilin Wu, the notional value of options expiring today exceeds $2 trillion. Historical data shows that the S&P 500 has a higher-than-average probability of closing lower on triple expiration dates. She also noted that Thursday's buying may have stemmed in part from bulls pushing up key technical levels in advance to lock in profitable positions. "Whether the rally can continue after expiration is the most important question to watch today."

Nick Twidale, chief market analyst at AT Global Markets, also stated, "With central bank policy still dominating the market and geopolitical risks remaining high, there should be ample room for volatility for the remainder of this week."

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