stock

Benchmark Nikkei 225 tops 68,000 for first time as AI-driven buying frenzy shows no signs of slowing down.

Japan’s stock market has hit an all-time high as a global buying frenzy driven by AI shows no signs of slowing down.

The Nikkei 225 rose nearly 3 percent on Wednesday, lifting the benchmark index above 68,000 for the first time.

The latest surge continues a banner year for Japan’s stock market, which is up nearly 33 percent so far in 2026.

“Investor enthusiasm over the AI boom is helping drive Asian equity markets higher,” Khoon Goh, head of Asia research at ANZ, told Al Jazeera.

“While strong demand for high-end chips has seen the top semiconductor companies in Taiwan and South Korea rally strongly, this is also benefiting Japanese markets, which are also getting some tailwind from a weak yen.”

Japanese firms involved in the semiconductor business led the gains.

Tokyo Electron, Japan’s largest manufacturer of semiconductor equipment, soared as much as 14 percent in morning trading.

Advantest, which supplies testing equipment to the semiconductor industry, rose more than 5.5 percent.

Shin-Etsu Chemical, a supplier of silicon wafers used in integrated circuits, gained about 4 percent.

Softbank, which is heavily invested in AI models, chips and data centers, fell about 3 percent, after overtaking auto giant Toyota on Monday to become Japan’s biggest company by market capitalisation.

Ferocious demand for AI chips has been driving record-breaking rallies in stock markets across the globe, taking key indexes in the US, Japan, South Korea, Taiwan to record highs.

During the past month, three memory chip makers – South Korea’s SK Hynix and Samsung Electronics, and US-based Micron – entered the elite club of firms with a market capitalistion of at least $1 trillion.

Only 17 companies have hit the milestone, all but five of which are based in the United States.

Despite concerns about the sustainability of the sky-high valuations in the sector among some investors, tech companies are continuing to commit huge sums to AI-related infrastructure.

US tech giants are expected to spend about $800bn on AI-related capital investment in 2026, according to Goldman Sachs.

Google parent company Alphabet on Monday became the latest Silicon Valley giant to outline its AI-related investment plans, announcing that it would sell $80bn worth of shares to help fund expected capital expenditures of $180-190bn in 2026.

US tech giant says fundraising drive includes deal to sell $10 bn of stock to Berkshire Hathaway.

Alphabet, Google’s parent company, has announced plans to sell $80bn worth of shares to fund its rollout of artificial intelligence.

Alphabet said on Monday that the equity offerings would finance the rollout of AI infrastructure needed to meet “unprecedented customer demand”.

The US tech giant said the fundraising drive included a deal to sell $10bn of stock to Berkshire Hathaway, the conglomerate led for six decades by legendary investor Warren Buffett.

The remaining $70bn will come from $30bn in underwritten offerings – a type of share issuance where a financial institution buys stock to sell on to investors – and $40bn in staggered sales on the open market.

“The company is experiencing strong demand for its AI solutions and services from enterprises and consumers, at levels that are exceeding the company’s available supply,” Alphabet said in a statement.

“By scaling its investments, the company seeks to expand its foundational infrastructure to support the significant growth opportunity ahead.”

Shares of Alphabet, which has a market capitalisation of more than $4.5 trillion, were down about 1 percent in after-hours trading following the announcement.

Like other Silicon Valley giants, Alphabet, whose AI business spans the Gemini family of assistants, data centres and cloud services, has committed eye-watering sums to AI-related infrastructure.

The company said in its most recent earnings call that it expected its capital expenditures to reach $180-190bn this year, and rise “significantly” in 2027.

US tech behemoths, such as Alphabet, Microsoft, Amazon and Meta, are expected to spend some $800bn on AI-related capital investment in 2026, according to an analysis by Goldman Sachs.

Troy Hooper, co-head of equity capital markets for the Americas at the financial intelligence provider Mergermarket, said Alphabet’s funding plans underscored the intensity of the race to lead the AI buildout.

“For hyperscalers, compute capacity is a direct driver of future revenue,” Hooper told Al Jazeera.

“By leaning into equity, Alphabet is bringing in permanent capital rather than burdening a balance sheet already absorbing record capex,” Hooper said, using the shorthand for capital expenditure.

Hooper said US tech giants have come to view underinvestment in AI as an “existential risk” and over-investment as “merely expensive”.

“The logic is simple: under-investing is an existential risk; over-investing is merely expensive. Microsoft, Amazon, and Meta are following the same calculus,” Hooper said.

“Ownership at scale lowers the marginal cost of training advanced models, building a moat smaller competitors will struggle to match. The message is clear: The winners of the AI era will be decided not just by algorithms, but by who owns the largest and most efficient compute platforms.”

Passengers have been advised to check with their airlines before they travel

The Government has said it is “closely monitoring” UK jet fuel stocks as airlines prepare for a potential shortage. UK airlines have insisted they are “not currently seeing a shortage of jet fuel” as they buy it in advance and airports maintain stocks, the Department for Transport (DfT) said in an update published on Friday evening.

But airports will also make it easier for airlines to cancel flights without running the risk of losing their allocated “slots” – scheduled times for take-off or landing which some UK airports assign to airlines – if fuel shortages prevent them from flying.

Passengers have been advised to check with their airlines before they travel – and ensure they have appropriate travel insurance, according to the DfT.

This comes as oil prices continue to soar on the back of the US-Israel war on Iran and the closure of the Strait of Hormuz.

“There is no current need to change upcoming travel plans,” the DfT statement said.

“Since the closure of the Strait of Hormuz, we have been closely monitoring UK jet fuel stocks and working with airlines, airports and fuel suppliers to ensure passengers keep moving and businesses are supported.

“Government regularly meets with industry to monitor risks, understand pressures and ensure clear communication with passengers, should circumstances change.”

It added: “We recognise that families may be concerned, and that aviation and tourism businesses are operating in challenging global conditions.

“We are working hand in hand with industry to help flights keep operating.”

The DfT said airlines will also no longer be required to follow the “use it or lose it” rule at UK airports, whereby airlines must use at least 80% of their allocated slots during a season to keep them for the following year.

“Airport Coordination Limited, the independent body that manages slot allocation at UK airports, has updated its guidance so that airlines will not lose their slots if fuel shortages prevent them from flying,” the DfT update said.

“Airlines can now apply for an exemption from the ‘use it or lose it’ rule in these circumstances.” A spokesperson for Jet2 said its flight schedule remains unaffected for the foreseeable future.

“We remain in continual dialogue with our fuel suppliers, as is standard practice,” the spokesperson said. “Based on the conversations we have been having, we see no reason not to look forward to operating our scheduled programme of flights and holidays as normal.”

The airline also confirmed there will be no surcharge on any booked flights or holidays to cover cost increases, including those linked to jet fuel.

“Amidst speculation that some airlines and travel companies may introduce such surcharges, which would mean their customers facing additional costs after making a booking, Jet2 has removed the surcharge provision across all flights and holidays, even though the company has never previously applied them,” the airline announced on Friday.

Steve Heapy, CEO of Jet2, said: “Holidaymakers should have every right to book their hard-earned break in the sun, without worrying about being hit with additional costs, and they can have that complete assurance when they book a flight or holiday with Jet2.

“As a result of today’s announcement, customers booking with Jet2 know that they are locking in their price without additional cost surprises later and we strongly believe that is the right thing to do by them.”

It is understood that Virgin Atlantic and easyJet are also expecting to operate as normal.

European stocks were mostly steady on Wednesday as investors weighed signals from Washington that a diplomatic breakthrough in the Iran war could be imminent.

ADVERTISEMENT

ADVERTISEMENT

The pan-European Stoxx 600 had ticked down 0.1%, Germany’s Dax edged 0.11% higher and the FTSE 100 climbed 0.11%. The CAC 40 in France fell by a slightly greater margin, at 0.65%.

US President Donald Trump said fresh talks between Washington and Tehran “could be happening over the next two days” in Islamabad, signalling a possible diplomatic breakthrough, and added that the war was “very close to over” — despite continued uncertainty over key sticking points in negotiations.

Asian markets were broadly higher.

Japan’s Nikkei 225 gained 0.5%, South Korea’s Kospi jumped 3.0% and Hong Kong’s Hang Seng edged up 0.7%.

The Shanghai Composite added 0.2%, while Australia’s S&P/ASX 200 was little changed, up less than 0.1%.

On Wall Street, the S&P 500 added 1.2% to its gains from the previous day, and the index at the heart of many 401(k) accounts is now just 0.2% below its record set in January.

The Dow Jones Industrial Average rose 317 points, or 0.7%, while the Nasdaq Composite climbed 2%.

On Wednesday, benchmark US crude inched up by 1 cent to $91.29 a barrel.

Brent crude added 48 cents to $95.27, or less than 1%, after falling 4.6% the previous day. While that is still above its roughly $70 level from before the war began in late February, it remains well below the peak of $119.

Lower oil prices help reduce costs for businesses across the economy. However, some analysts noted that the war is still ongoing, warning that the optimism may prove unfounded.

“The counterintuitive decline in crude appears driven by growing hopes that a second round of peace talks between Washington and Tehran could soon materialise, after the first attempt fizzled out,” said Tim Waterer, chief market analyst at KCM Trade.

“Traders are clearly choosing to price in the possibility of de-escalation rather than the immediate reality of restricted flows,” he added.

Asian nations depend on access to the Strait of Hormuz, a narrow waterway that is the main route for crude oil produced in the Persian Gulf to reach customers worldwide. Disruptions there have kept oil off the global market, driving up prices.

Global inflation this year is expected to accelerate to 4.4% from 4.1% in 2025, according to the International Monetary Fund, which had previously forecast a slowdown to 3.8%.

The IMF also downgraded its forecast for global economic growth to 3.1% this year, from 3.3% projected in January.

Overall, the S&P 500 rose 81.14 points to 6,967.38. The Dow Jones Industrial Average gained 317.74 points to 48,535.99, while the Nasdaq Composite climbed 455.35 points to 23,639.08.

In the bond market, Treasury yields eased as falling oil prices reduced inflationary pressure. The yield on the 10-year Treasury fell to 4.25% from 4.30% late Monday.

In currency trading, the US dollar edged up to 159.03 Japanese yen from 158.79 yen. The euro stood at $1.1780, down from $1.1797.

US stocks climbed to the brink of a record high on Tuesday, while oil prices eased as hopes grew that Washington and Tehran may resume talks to end their war.

The S&P 500 rose 1.2%, leaving it just 0.2% below its January peak. The Dow Jones Industrial Average gained 0.7%, while the Nasdaq Composite jumped 2%, tracking broader global market gains.

Investors are betting that renewed diplomacy could prevent a prolonged surge in oil prices and inflation, allowing focus to return to corporate earnings.

Brent crude for June delivery fell 4.6% to $94.79, down from recent highs, though still above pre-war levels.

However, volatility remains high, with markets sensitive to developments around the Strait of Hormuz, a key route for global oil supply.