Asia stocks bounce back after Nvidia probe and midterm election jolt

Asian stock markets reversed a week of steep losses on Monday, climbing sharply as investors processed two major developments: the aftermath of the US midterm elections and a new internal probe at chipmaker Nvidia.

The Nikkei 225 index in Tokyo jumped 3.45 percent by 04:00 GMT. The rally was even more pronounced in Taipei, where the Taiex index surged 5.72 percent. In Seoul, the Kospi index gained 1.68 percent, and the Hang Seng Index in Hong Kong rose 0.19 percent.

Futures for US indexes pointed to continued optimism heading into the American trading day. Contracts for the S&P 500 stood at 0.60 percent higher, while Nasdaq 100 futures, which carry heavy tech weighting, were up 0.59 percent.

The momentum on the floor was initially mixed due to news out of Santa Clara. Nvidia announced it would launch an internal investigation into CEO Jensen Huang. The probe examines a romantic relationship Huang had with a woman accused of being a Chinese spy. This news caused a brief dip in futures before the wider rally took hold.

Nvidia’s board issued a statement saying it remains confident in Huang. The board said it does not believe national security or company secrets were compromised. An independent inquiry will examine all available information to ensure transparency, the company noted.

Huang has pledged full cooperation with the process. The board described US national and economic security as paramount to the company and its shareholders. The announcement aimed to reassure stakeholders that leadership is addressing the situation while keeping operations stable.

The current recovery follows a turbulent period triggered by the US midterm election results. The Democratic Party secured a sweeping victory, sparking fears that a new legislative majority might slow the rollout of data centers. Those data centers are critical for powering artificial intelligence initiatives.

Those concerns drove a sell-off of approximately $2.5 trillion on Wall Street on Thursday. The volatility quickly spread to Asian markets on Friday. The Nikkei 225 and the Kospi index both plunged, with losses of about 6 percent and 9 percent, respectively. The Hang Seng Index also dropped more than 1 percent that day.

The Monday session marks a sharp shift in direction from that Friday crash. Traders are closely monitoring whether this rebound can hold. The immediate fear surrounding the election results has eased, but the Nvidia investigation and questions about economic policy remain open issues for investors to watch.