Asian Stocks Slide as Chip Rout Deepens, Oil Gains: Markets Wrap
(Bloomberg) — Asian stocks retreated again as investors rotated out of chip shares amid growing skepticism over whether massive AI spending will deliver sufficient returns. Oil climbed after fighting erupted in the Middle East.
South Korea’s equity benchmark slumped 8.2% following an 11% plunge on Tuesday. Shares of chip major SK Hynix Inc. tumbled about 13% after even a 557% surge in its quarterly profit missed lofty estimates. Those of rival Samsung Electronics Co., which is due to report tomorrow, slid 8%. The moves sent the broader MSCI Asia Pacific Index down 1.6%.
“Given the weight of SK Hynix and Samsung on the Kospi, there’s nowhere to hide when they fall together,” said Josh Gilbert, lead analyst for Asia Pacific and the Middle East at Etoro Ltd.
Risk sentiment was also hurt by rising oil prices. Brent jumped more than 4% to trade above $88 a barrel, rebounding from its biggest three-day decline since April 2020, after the US said it intercepted an Iranian “surprise attack” on its troops and struck back at the Islamic Republic.
The renewed fighting in the Middle East shifted focus back to the Strait of Hormuz, with the risk of disruptions to oil flows threatening to fuel inflation just as markets awaited the Federal Reserve’s policy decision on Wednesday. That adds another layer of uncertainty for investors who are already rotating out of technology stocks. The sector has suffered in recent days also on account of concerns related to overcrowding and circular deals.
Meanwhile, President Donald Trump welcomed Israeli Prime Minister Benjamin Netanyahu to the White House Tuesday.
“We remain cautious of any potential deal that does not concretely settle the Hormuz topic, given disagreements over management of the Strait led to Iranian aggression and an early failure of the prior MOU,” said Ryan McKay, senior commodity strategist at TD Securities.
AI Spending
AI spending by the world’s biggest technology companies has reignited concerns about overinvestment as they seek to ride a multiyear boom in the sector. SK Hynix has earmarked at least $31 billion in capital spending this year, a record outlay. That’s after Alphabet Inc. last week raised its capital spending forecast to as much as $205 billion this year.
Those worries have dominated price action in stock markets, with shares of AI bellwethers dropping even after the companies beat earnings estimates.
As investors rotate out of tech, subgauges of consumer discretionary, finance and energy stocks are the top performers in Asia in the past month, according to data compiled by Bloomberg.
A gauge of chipmakers slipped 4.5% on Wall Street Tuesday, with the selloff also putting the Nasdaq 100 Index on the brink of a technical correction.
The moves create a challenging backdrop ahead of earnings from the largest US tech companies. Microsoft Corp. and Meta Platforms Inc. report results on Wednesday, followed by Apple Inc. and Amazon.com Inc. a day later.
“If sectors outside semiconductors deliver resilient earnings this season, investors may find it easier to shift their attention elsewhere,” said Ikuo Mitsui, a fund manager at Aizawa Securities Co.
Elsewhere, traders are also focused on the Fed. The central bank is expected to hold interest rates steady when it concludes its two-day meeting, but market participants are eyeing the possibility of a surprise hike as patience with high inflation wears thin. The Bank of England will announce its decision on Thursday and the Bank of Japan Friday.
Analysts at JPMorgan Chase & Co. said the probability of a rate hike is likely less than the roughly 30% chance currently priced, as “inflation, while elevated, does not appear to at-risk of an upside explosion.” They assign a 50% chance to a “hawkish hold,” as the central bank will want to stay vigilant even though recent energy prices suggest disinflation may be ahead.
Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.1% as of 12:38 p.m. Tokyo time Japan’s Topix fell 0.5% Australia’s S&P/ASX 200 rose 1% Hong Kong’s Hang Seng rose 1.2% The Shanghai Composite fell 0.5% Euro Stoxx 50 futures fell 0.4% Currencies
The Bloomberg Dollar Spot Index was little changed The euro rose 0.1% to $1.1400 The Japanese yen rose 0.1% to 163.65 per dollar The offshore yuan was little changed at 6.7725 per dollar Cryptocurrencies
Bitcoin fell 0.1% to $63,758.39 Ether fell 0.9% to $1,899.06 Bonds
The yield on 10-year Treasuries was little changed at 4.61% Japan’s 10-year yield declined 1.5 basis points to 2.760% Australia’s 10-year yield declined seven basis points to 4.89% Commodities
West Texas Intermediate crude rose 4.1% to $82.52 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.
–With assistance from Youkyung Lee, Momoka Yokoyama and Kanoko Matsuyama.
©2026 Bloomberg L.P.
