Asian Stock Indices Rise, Japan's Nikkei 225 Gains 2.77%
The rally was led by tech stocks on optimism about the AI sector. The Dow Jones also hit a record high the day before, closing above 50,000 points.
Title: Dow at 50,000 and Nikkei Above 63,000: Who Really Pays for the Tech Party
Author: Independent financial analyst (former Asian derivatives trader, 2012–2022)
Introduction
On May 22, 2026, Japan's Nikkei 225 closed at 63,393 points, up 2.77% for the day. The day before, on May 21, the Dow Jones Industrial Average hit an all-time high, closing above the psychological 50,000 mark for the first time at 50,285.66. The S&P 500 rose to 7,445.72, while the Nasdaq barely gained 0.09%.
Tech stocks are leading everywhere: Softbank surged 11.23%, IBM over 12% on news of quantum computing grants. Media outlets are touting an "AI rally" and "optimism over the US-Iran deal."
But I look at these numbers and see a picture missing from the headlines: the stock market lives in a parallel reality where geopolitics, debt, and interest rates exist but are seemingly ignored. And this ignorance cannot last forever.
[The Core]: What's Really Happening
The official narrative: the market is rising due to falling oil prices (Brent dropped below $103 a barrel from $109 in the morning) and hopes for an end to the Middle East conflict. US Secretary of State Marco Rubio cited "encouraging signals" in talks with Iran. Investors are also awaiting the swearing-in of new Fed Chair Kevin Warsh on May 22, who is known to favor lower rates.
But the hidden insight that goes unmentioned: the market is split in two. The tech stock rally is not a reflection of the entire economy's health but a bet on a single sector at the expense of everything else.
Consider the hidden story. In Europe, where the Middle East war directly hits the economy through energy prices, May data showed the sharpest drop in economic activity in two and a half years. The pan-European STOXX 600 index has fallen over 2% since the war began in February. However, as Reuters reports, two "baskets" of AI stocks—chipmakers (ASML, Infineon, STMicroelectronics, up 20% since April) and AI infrastructure companies (Schneider Electric, Prysmian, up 22%)—have accounted for more than two-thirds of all positive momentum in European stocks over the past month and a half.
In other words, if you removed these 10-15 companies from the European market, it would have already collapsed. Asian and US markets follow the same pattern, just on a larger scale due to the presence of true giants like Softbank, Taiyo Yuden, and NVIDIA.
Timeline and Context
- February 28, 2026 — Start of the war with Iran. Oil prices spike, markets fall.
- Early April 2026 — Earnings season for tech giants. Investors change their view that AI spending was excessive. A rally begins that continues to this day.
- May 20, 2026 — The US Department of Energy announces $2 billion in grants to nine companies in quantum computing (IBM, D-Wave, Rigetti, and others). Stocks surge.
- May 21, 2026 — Dow closes above 50,000 for the first time in history. Key factors: falling oil, Iran talks, anticipation of Fed leadership change.
- May 22, 2026 — Nikkei 225 closes at an all-time high of 63,393, led by the tech sector. Dow Jones futures continue to rise, trading above 50,500.
Who Wins and Who Loses
Winners:
- Holders of the "Big Seven" AI stocks. In the US: NVIDIA, Apple, Amazon, IBM. In Japan: Softbank (+11.23% for the day), Taiyo Yuden (+13.46%). In Europe: ASML, Schneider Electric.
- Quantum companies. IBM rose over 12% on grant news. Rigetti, D-Wave, and others saw similar gains.
- Traders betting on lower oil and dollar. Brent's drop to $103 lowers inflation expectations and pressures the US dollar.
Losers:
- Energy sector. Energy stocks in the S&P 500 fell 1.01% on May 21—the only sector with a significant decline, alongside consumer staples (-1.63%). Investors flee oil and gas for tech.
- European cyclical companies. Automakers, chemicals, heavy machinery—all suffer from high energy prices. Their stocks are undervalued, but no one is buying.
- "Diversified" investors. Those holding broad market indices don't fully participate in the rally because non-tech components drag the portfolio down.
What the Media Leaves Out
The main omission is the timing and price of a deal with Iran. Iranian officials have stated that no agreement has been reached yet, though gaps have narrowed. Talks could drag on for months. If they collapse, oil will return to $110-115, and all current optimism will evaporate within 48 hours.
Moreover, no one talks about the real impact of new Fed Chair Kevin Warsh. Yes, he favors lower rates, but he also advocates for systematically reducing the Fed's balance sheet. This means that even if rates drop, liquidity will be drained from the market through bond sales from the Fed's balance sheet. That's a direct blow to the stock market, especially tech, which is sensitive to liquidity.
Also note the currency factor. Japan's Nikkei is rising in yen, but the yen has weakened 2-3% against the dollar over the past month. Part of the index's growth is simply a currency effect for foreign investors, not a real increase in the dollar-denominated market cap of Japanese companies.
Forecast: Next 30 Days and 90 Days
30 days (until June 22, 2026):
The market will continue to attempt gains, but volatility will spike sharply. The key factor is US-Iran talks. If a concrete signing date emerges, oil could fall to $95-98, and the Dow could quickly reach 51,000. If talks stall, the market will correct 3-5%. Japanese stocks are most vulnerable (Nikkei could fall to 60,000) due to their high sensitivity to energy prices. An additional risk is the Fed meeting on June 16-17 (the first under new Chair Warsh). Any hint of hawkishness will crash the Nasdaq.
90 days (until August 22, 2026):
A correction scenario is more likely than a continued rally. Historical pattern: after the Dow hits a round psychological level (30,000, 40,000, now 50,000), a period of consolidation or pullback typically follows for 2-4 months. Add summer seasonality (July-August are traditionally weak months for stocks) and uncertainty over Iran. I forecast a Dow range of 48,000-51,000 over the summer. The most interesting opportunities are not in tech but in lagging sectors: European cyclical stocks (Volkswagen, BASF) could offer 10-15% upside on any progress in ending the war, as they currently trade at a huge discount.
Editorial Forecast
Asset: Brent crude oil futures
Direction: Moderate decline in the next 24-72 hours (-1% to -2%)
Key levels: $102.50 — nearest support; $100.00 — psychological level. A break below $100 could lead to accelerated movement toward $97.50
Confidence level: Medium (65%)
Main risk: Any statement from Iran or the US about talks collapsing would immediately push oil back above $105-107, and the stock market could reverse downward. The inauguration of the new Fed Chair on May 22 could also bring surprises if his rhetoric proves tougher than expected. The current rally has priced in too much optimism—any negative trigger will spark profit-taking.
— Editorial Team
