Asian Markets Rally on U.S. Inflation Data, AI Earnings

South Korean stocks led a broad rally across Asian markets on Thursday as investors reacted to U.S. inflation data that met expectations, reducing the perceived likelihood of an imminent interest rate increase by the Federal Reserve. The optimism was further fueled by strong earnings from major technology companies, reviving interest in artificial intelligence-related stocks.

South Korea's benchmark KOSPI index surged almost five percent in early trading, marking its strongest performance in months. The rally was spearheaded by chipmakers SK Hynix and Samsung, which recovered significant ground after a sector-wide selloff that had wiped trillions of dollars from valuations between late June and July. That downturn had been driven by concerns over returns on massive AI investments and forced liquidations. The index, which had fallen 40 percent from its record high to a recent trough before rebounding about 20 percent, remained in bear market territory.

The market jump was underpinned by the release of the U.S. Consumer Price Index data for July. The report showed a 0.1 percent increase in consumer prices, in line with forecasts, and core inflation that rose 0.2 percent from the...