Asian stocks advanced on Tuesday after a series of dovish comments from Federal Reserve officials strengthened expectations that US interest rates will be cut next month, while a tech-driven surge on Wall Street helped calm recent concerns over an AI-fuelled market bubble.

Following weeks of volatility, sentiment brightened as weakening US labour data increased the likelihood of a third consecutive rate reduction. Fed governor Christopher Waller said on Monday that inflation was no longer his primary concern, stressing the need to support the labour market. “So I`m advocating for a rate cut at the next meeting,” he told Fox Business.

Waller’s remarks echoed those of San Francisco Fed president Mary Daly, who warned the Wall Street Journal that she was less confident the Fed could stay ahead of labour-market deterioration. She also said the inflationary impact of President Donald Trump’s tariffs had been far smaller than anticipated.

New York Fed chief John Williams added on Friday that there was still “room for a further adjustment” at the December 9–10 policy meeting. Analysts noted that the absence of pushback from Fed chair Jerome Powell signalled his support for another cut.

Traders now assign roughly a 90 percent chance of a December reduction, up from around 35 percent last week.

The growing optimism sent Wall Street higher for a second straight session on Monday, with the S&P 500 climbing 1.6 percent and the Nasdaq jumping 2.7 percent, led by strong gains from tech heavyweights Alphabet, Meta and Amazon.

Asian markets extended the rally on Tuesday. Hong Kong, Shanghai, Seoul, Taipei, Manila and Jakarta all posted gains, while Sydney, Singapore and Wellington edged lower.

Tech shares have bounced back after recent selling sparked by fears that the year’s AI boom had overstretched valuations and that the massive investments in the sector may take time to pay off. Saxo Markets analyst Charu Chanana said the market was shifting from broad enthusiasm to a more selective approach focused on fundamentals.

Sentiment was further supported by comments from President Trump, who described US-China relations as “extremely strong” after speaking with President Xi Jinping. Trump said he would visit China in April and that Xi would travel to Washington in 2026, though neither side disclosed details of their discussion on Taiwan. China later said Trump reaffirmed that the United States “understands how important the Taiwan question is to China.”

Key figures around 0230 GMT:

Tokyo – Nikkei 225: UP 0.4% at 48,815.27 (break)

Hong Kong – Hang Seng Index: UP 1.2% at 26,031.67

Shanghai – Composite: UP 1.1% at 3,877.86

Euro/dollar: $1.1526, up from $1.1523

Pound/dollar: $1.3109, down from $1.3110

Dollar/yen: 156.68, down from 156.81

Euro/pound: 87.92 pence, up from 87.91

West Texas Intermediate: DOWN 0.2% at $58.73

Brent crude: DOWN 0.2% at $63.23

New York – Dow: UP 0.4% at 46,448.27 (close)

London – FTSE 100: DOWN 0.1% at 9,534.91 (close)