AI Chip Demand and a Softer Warsh Lift Markets

Technology shares moved higher after Micron reported sharply higher revenue tied to artificial intelligence chip demand, and Accenture raised its growth outlook. The two results, reported before the weekend, eased concerns that enterprise technology spending was weakening. For a market that has been trading on AI sentiment, the read-through mattered: if chipmakers and consultancies are both seeing demand, the AI buildout is not just a hardware story.

The second leg of the rally came from monetary policy. Fed Chair Kevin Warsh, speaking in Bangkok, said AI investment is a big boon for the US economy. He did not comment specifically on monetary policy or the economic outlook, but traders read the tone as dovish enough to act on. The probability of a Fed rate hike in October fell to 15 percent from more than 25 percent on Thursday, according to market pricing reported on October 25, 2026.

Equity futures and Asian markets responded quickly. Nasdaq 100 futures rose as much as 0.2 percent after Warsh's remarks, having earlier fallen 0.5 percent. The MSCI Asia Pacific equity index gained 1.5 percent, and South Korea's Kospi rose 3.6 percent. The Bloomberg dollar index fell 0.2 percent, while gold rose 0.2 percent to about $4,180 an ounce.

The mechanics of the move are worth unpacking. Warsh's comment that he would not prejudge the meeting, against a backdrop of stronger inflation data, left traders with an opening to unwind hike wagers. Charu Chanana, chief investment strategist at Saxo Markets, said Warsh did not commit to another hike, so the market is partly unwinding Fed hike bets, and that his reluctance to prejudge is not helpful for the dollar.

The combination of strong AI-linked earnings and a softer rate path is a potent mix for risk assets. Micron's results speak to the demand side of the AI trade, while Warsh's remarks speak to the cost of capital side. When both point the same way, positioning adjusts fast, as the Kospi's 3.6 percent jump suggests. Korean chip stocks are a leveraged play on the same memory demand Micron just confirmed.

There are caveats. Warsh's productivity and jobs task force will hold field hearings in the San Francisco Bay Area next month, a signal that the Fed is studying AI's economic effects rather than simply celebrating them. And a 15 percent probability of an October hike is not zero. If inflation data continues to run hot, the pricing could shift back before the meeting.

For now, the market has two reasons to feel better: enterprise AI spending is holding up, and the Fed chair did not push back against expectations for a pause. The question for the coming week is whether either leg can be confirmed. Another strong AI-linked result would reinforce the demand story. Any hawkish follow-up from Fed officials would test how durable the repricing really is.