SINGAPORE - Technology stocks powered Asian markets higher on Tuesday as lower oil prices lifted sentiment and investors ​pinned their hopes on US-Iran talks, while the dollar stood tall on bets that more hikes are needed to rein ‌in inflation.

Brent crude futures steadied at $100.22 per ​barrel after dropping over 3 percent in the previous session, moving below the key $100 level briefly.

"The drop in oil is a big factor," said Nick Twidale, chief market strategist at ATFX Global. "Oil is ​the main driver and investors are jumping back into AI as has been the pattern this year."

MSCI's broadest index of Asia-Pacific shares outside Japan rose over 1 percent in early trading. Tech-heavy South Korean stocks jumped nearly 2 percent. Japan markets are closed for a holiday.

Nasdaq futures rose 0.37 percent while European ​futures were 0.3 percent higher. Much of the AI enthusiasm has been centered on the strong reception to the launch of Meta's Muse AI assistant.

"The excitement around Meta Muse is ‌adding weight to the idea that millions of people could eventually use persistent AI agents," said Chris Weston, head of research at Pepperstone.

Rate hikes on the way

Investors are also contending with a fresh wave of rate hikes and hawkish signals from major central banks, reinforcing ​expectations of further tightening later this ​year. The shift has underpinned the dollar and piled pressure on the yen.

The yen was at 157.39 per US dollar, hovering near a three-week low after surrendering early-month gains driven by bets on a faster pace of Bank of Japan rate ​hikes.

The BOJ raised rates last week to a 31-year high but two dissenting votes and lack of explicit ​hawkish guidance disappointed investors, leaving the yen vulnerable and stoking intervention jitters.

"FX intervention remains a blunt tool to prop up currencies, and without a forceful monetary policy response it will be difficult for Japanese authorities to rein in the selloff in the yen," said Matthew Ryan, head of market strategy at Ebury.

The Federal Reserve, by contrast, raised ​rates last week and warned its fight against inflation was not over, keeping the ​door open to further tightening.

The dollar index, which measures the US currency against six other units, was at 100.4, just shy of a seven-week high. Traders are pricing in a ​56 percent chance of a hike in October, compared with 43.5 percent a week earlier, CME FedWatch tool showed.