Asian equities snapped back on Thursday, recovering part of the prior session’s slide as anxiety over stretched technology valuations abated and a solid trade print from Australia steadied sentiment. Gains in Japan and China set the tone, while U.S. equity futures held broadly steady following an overnight bounce on Wall Street.

Japan’s Nikkei 225 rose 1.5% after falling 2.5% on Wednesday, with the broader TOPIX up 1.4%. After a strong month-long run, some consolidation was “natural,” UBS analysts said, framing the setback as positioning rather than a turn in fundamentals. In China, the CSI 300 climbed 1.4%, supported by heavyweight tech and consumer names, while Hong Kong’s Hang Seng added 1.6% and the Hang Seng TECH sub-index jumped more than 2% as semiconductor and AI-linked shares rebounded. South Korea’s KOSPI advanced 1.3%, clawing back part of Wednesday’s outsized drop.

Tech sentiment improved on the margin as investors reassessed how far valuations had drifted ahead of earnings power. A Reuters report suggesting Beijing plans to bar foreign-made AI chips in state-funded data centers buoyed Chinese chipmakers, adding a domestic-policy tailwind to the sector’s recovery. Still, with U.S. bank chiefs warning this week about “bubble-like” dynamics in parts of the market, the region’s tech trade remains highly sensitive to guidance and macro headlines.

Regionally, attention also turned to Washington, where U.S. Supreme Court justices heard arguments over the use of emergency powers to impose tariffs under the Trump administration—an outcome that could influence trade policy mechanics and, by extension, global supply chains.

Macro data offered a fresh bright spot. Australia’s trade surplus widened sharply to A$3.94bn in September from roughly A$1.11bn in August, driven by a rebound in exports—particularly commodities—alongside softer imports. The print helped lift the S&P/ASX 200 by 0.3%, even as stock-specific news in financials weighed.

Bank earnings were a mixed bag. National Australia Bank fell nearly 4% after reporting a full-year net profit slightly below last year (but broadly in line with expectations), as investors focused on margin pressure and provisioning trends. In Singapore, DBS Group rallied 3% on record third-quarter total income, powered by wealth management and deposits, while United Overseas Bank slid 3.5% after a 72% drop in net profit on higher credit provisions and guidance for a lower net interest margin into 2026.

Elsewhere, Singapore’s STI gained 1.3%, while India’s Nifty 50 futures softened modestly, reflecting a more selective risk tone across South and Southeast Asia.

Outlook: With Wall Street steadier and Asia staging a relief bounce, near-term direction will hinge on incoming U.S. labor indicators and earnings guidance from tech bellwethers. The regional bid looks tentative rather than emphatic: positioning has lightened, but concentration risks in AI-exposed leaders and the policy path in the U.S. keep volatility risk elevated. A sustained improvement likely requires confirmation that earnings momentum can meet—or reset—lofty expectations without a larger valuation air pocket.