(Bloomberg) — Emerging-market assets gained Tuesday, with Asian technology shares rebounding from steep losses earlier in the week and most currencies strengthening against the dollar ahead of a key US inflation report.

A gauge of developing-world currencies was up 0.2% as of 1:50 p.m. in New York, its first gain in six sessions amid losses in the greenback and oil prices. The index briefly erased its gains after President Donald Trump vowed to retaliate against Iran over the downing of a US military helicopter. Trump had previously said a deal to end the conflict in the Middle East was within reach.

“The geopolitical backdrop remains uncertain,” BBVA strategists including Alejandro Cuadrado wrote in a note. “The broader macro focus remains on global risk and US yields, and in particular on Wednesday’s US CPI release.”

Emerging markets are witnessing greater volatility as concerns grow that the rally in AI has gone too far and upcoming share offerings by large US technology companies could drain capital from secondary markets. The concerns are most clearly seen in South Korea’s Kospi index, which jumped today after slumping 15% in the previous three trading sessions.

The major question for investors is whether the tech rout that started on Friday “would mark the beginning of a deeper and much-needed correction, or just a blip,” Ipek Ozkardeskaya, a senior analyst at Swissquote, wrote in a note. “The early answer is: it could be another blip.”

On Tuesday, the Asia-heavy benchmark for emerging-market stocks snapped a four-day rout, climbing as much as 3.5%.

JPMorgan Chase & Co. boosted its recommendation on emerging-market currencies, favoring frontier markets, high-yielding names and those “where central banks are ready to hike” in response to a stronger growth-inflation mix. The bank turned bullish on the Czech koruna, South African rand and Chilean peso.

“Our portfolio remains pro-carry but we also rotate into currencies where central banks are proactively turning hawkish,” strategists including Luis Oganes wrote in a note. 

The rupiah outperformed after Indonesia’s central bank took aggressive action to reverse a market selloff, hiking interest rates in a surprise move. The decision followed foreign outflows triggered by policy uncertainty under President Prabowo Subianto. 

Peruvian assets advanced as investors bet Keiko Fujimori will defeat leftist candidate Roberto Sanchez in a razor-edge race as votes from citizens living abroad are counted. The sol outperformed and dollar bonds edged higher.

Traders are shifting focus to Wednesday’s CPI report, which could be key in determining whether markets continue to price in the possibility of a rate hike by the Federal Reserve this year. While headline inflation is expected to remain elevated, core inflation should post a more subdued reading, according to Bloomberg Economics. 

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