Asian Stocks Drop After Chip Selloff, Oil Gains: Markets Wrap
(Bloomberg) — Asian stocks edged lower after a selloff in chipmakers dragged down Wall Street as investors questioned whether massive artificial-intelligence investments can justify lofty valuations. Oil climbed.
The MSCI Asia Pacific Index slid 0.3%, with declines in Japan and Australia. South Korea is closed for a public holiday. Contracts on the Nasdaq 100 dropped 0.5% after the underlying gauge lost 1.6% on Thursday. Also weighing on sentiment was Netflix Inc., whose shares fell over 8% in extended trading after forecasting a second straight quarter of slowing sales growth.
In a renewed bout of volatility Thursday, a US gauge of chip giants slumped more than 4% as investors questioned whether tech stocks have grown too richly valued amid massive capex plans. Taiwan Semiconductor Manufacturing Co.’s American depositary receipts dropped 2% as a solid outlook was overshadowed by a higher spending forecast.
Elsewhere, Brent recouped some of the previous session’s losses as hostilities across the Middle East continued to escalate and shipping traffic slumped in the Strait of Hormuz. The commodity traded just under $85 a barrel. Government bonds edged lower in Australia and New Zealand, while Treasuries were steady.
“The action in the chip stocks going forward is still the most important issue for the stock market,” said Matt Maley, chief market strategist at Miller Tabak. “They are definitely showing some meaningful cracks, so they’re going to have to see a strong and sustainable rebound soon or it will raise some real warning flags.”
Heightened geopolitical tension helped keep a lid on risk appetite and pushed oil prices higher this week, fueling concerns about inflationary pressures that could prompt the Federal Reserve to raise interest rates before the year is over. Treasury yields edged higher Thursday and the dollar notched modest gains.
Fed Bank of Kansas City President Jeff Schmid said inflation is his biggest worry given the risk of a further acceleration in the months ahead. His Dallas counterpart Lorie Logan called for higher rates, saying inflation does not appear to be heading sustainably back to the target.
Traders also parsed key economic reports. Jobless claims fell last week while retail sales rose modestly in June, dragged down by a drop in gas-station receipts that masked strong gains at some merchants.
“Despite challenges, consumers are still spending and the labor market shows no signs of cracking,” said Ellen Zentner at Morgan Stanley Wealth Management. “This type of data won’t move the Fed’s needle either way, but it underscores the ongoing resilience of the US economy.”
Corporate Highlights:
United Airlines Holdings Inc.’s outlook came in short of expectations, highlighting how a spike in fuel costs is overshadowing strong travel demand. UnitedHealth Group Inc. boosted its outlook for the year and reported quarterly profit well ahead of Wall Street’s views. Abbott Laboratories raised its guidance after a solid second quarter driven by improved performance across most of its business lines. Merck & Co. won US regulatory approval of a pill that rivals powerful injections for cutting dangerous cholesterol levels. Eli Lilly & Co. agreed to buy AtaiBeckley Inc. for as much as $3.8 billion, underscoring interest in the once-fringe area of psychedelic medicine. What Bloomberg Strategists Say…
“Chip-stock price action has not been terribly encouraging. This magnitude of decline is likely to herald more selling pressure from levered ETFs, even though the AUM of products like SOXL is considerably lower than it was a few weeks ago.”
—Cameron Crise, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.3% as of 9:07 a.m. Tokyo time Hang Seng futures fell 0.3% Japan’s Topix fell 1.3% Australia’s S&P/ASX 200 fell 0.3% Euro Stoxx 50 futures were unchanged Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1445 The Japanese yen was little changed at 162.41 per dollar The offshore yuan was little changed at 6.7734 per dollar Cryptocurrencies
Bitcoin fell 0.6% to $63,711.44 Ether fell 0.5% to $1,861.69 Bonds
The yield on 10-year Treasuries was little changed at 4.56% Japan’s 10-year yield was unchanged at 2.715% Australia’s 10-year yield advanced two basis points to 4.92% Commodities
West Texas Intermediate crude rose 0.7% to $79.53 a barrel Spot gold rose 0.2% to $3,984.85 an ounce This story was produced with the assistance of Bloomberg Automation.
©2026 Bloomberg L.P.
