Asian equities traded mostly lower on Thursday after a fresh sell-off in artificial intelligence-related stocks dragged US markets sharply lower overnight.
US stock futures edged higher in early trade, while crude oil prices rose by more than $1 a barrel.
Asian markets mostly weaker
Japan’s Nikkei fell 0.5% to 63,878.60, while South Korea’s Kospi declined 0.2% to 7,720.75.
Other major markets showed mixed performance:
- Hang Seng (Hong Kong): up 0.2% to 24,468.82
- Shanghai Composite: down 0.2% to 3,983.80
- S&P/ASX 200 (Australia): down 0.2% to 8,632.50
- Taiwan Taiex: down 0.4%
Wall Street records sharp losses
US markets fell for a second straight session.
- S&P 500: down 1.6% to 7,266.99
- Dow Jones Industrial Average: down 953 points, or 1.9%, to 49,918.78
- Nasdaq Composite: down 2% to 25,169.50
The decline extended the recent weakness in AI-related stocks after a prolonged rally.
Investors are assessing whether the recent correction marks the end of excessive optimism or the beginning of a more sustained downturn.
AI stocks remain under pressure
Super Micro Computer dropped 28% after announcing plans to raise $7 billion through the sale of shares and convertible preferred stock.
The move raised concerns about dilution for existing shareholders.
Micron Technology fell 4.7% after a series of sharp swings in recent sessions.
Despite the volatility, the stock remains up 212.5% so far this year.
Among heavyweight AI stocks:
- Nvidia declined 3.7%.
- Broadcom fell 5.1%.
Some investors are also believed to be pulling money from existing positions ahead of high-profile listings expected in the US market.
Oil prices rise amid Iran tensions
Energy prices climbed as geopolitical tensions persisted.
On Wednesday, Brent crude rose 1.8% to $93.10 per barrel after US President Donald Trump warned that Iran would “pay the price” for stalled negotiations.
The conflict has effectively disrupted oil tanker movement through the Strait of Hormuz, affecting crude supplies from the Persian Gulf.
Early Thursday:
- Brent crude gained another $1.34 to $94.44 per barrel.
- US benchmark crude rose $1.50 to $91.53 per barrel.
Higher oil prices also weighed on companies with significant fuel costs.
- United Airlines fell 6.2%.
- Carnival Corp. lost 6.3%.
Inflation concerns return
A report released on Wednesday showed that US consumer prices rose in May at the fastest pace in three years.
Markets are increasingly betting that the Federal Reserve may have to raise interest rates at least once this year.
Higher rates typically increase borrowing costs and can put pressure on equity valuations, particularly in high-growth sectors.
Currency market
In early Thursday trade:
- The US dollar slipped to 160.44 yen from 160.56 yen.
- The euro rose to $1.1555 from $1.1537.
TL;DR
Asian shares traded mostly lower after another sell-off in AI stocks pushed Wall Street sharply down. Nvidia and Broadcom extended losses, while rising oil prices and higher US inflation added to investor concerns.
AI Summary
- Asian markets were mostly lower after Wall Street’s decline.
- The Nasdaq fell 2%, led by weakness in AI stocks.
- Super Micro Computer dropped 28% after announcing a $7 billion fundraising plan.
- Nvidia and Broadcom also came under pressure.
- Oil prices climbed as tensions involving Iran disrupted supplies.