Asian Shares Decline Amid Big Tech Selloff and Oil Price Uncertainty

Asian markets experienced a downturn on Thursday, with South Korea’s Kospi index dropping more than 4%. The declines followed reductions among Big Tech firms, notably memory chipmaker SK Hynix. Brent crude oil held steady, trading close to $79 per barrel. The market outlook remains unclear due to ongoing tensions from the U.S. conflict with Iran, affecting investor sentiment despite hopes of reopening the Strait of Hormuz.

The upcoming release of the U.S. employment report for July, set for Friday, adds to the cautious mood. Stephen Innes from SPI Asset Management noted that Asia’s chip selloff appears to be a mix of profit-taking and risk reduction ahead of the nonfarm payroll report.

Despite robust corporate profits and growth expectations boosting U.S. stocks, Asian markets are suffering from selling pressures on companies connected to the artificial intelligence boom. SK Hynix’s shares fell 9.7%, while Samsung Electronics dropped 6.1%. The Kospi index decreased by 4.5% to 6,306.40. Japan’s Nikkei 225 declined 1.2% to 65,538.44. The Hang Seng index in Hong Kong decreased 1.8% to 25,463.51, whereas the Shanghai Composite index remained largely unchanged at 3,878.92. Australia’s S&P/ASX 200 increased by 0.5%.

U.S. President Donald Trump commented on a potential resolution to reopen the Strait of Hormuz soon. The ongoing five-month conflict has disrupted global oil supply, affecting energy markets. Brent crude fell 0.3% to $79.24 per barrel, while U.S. benchmark crude dipped 0.4% to $74.93 per barrel.

On Wall Street, the S&P 500 saw a slight decrease of 0.2%, closing at 7,723.55. The Dow Jones Industrial Average rose 0.5% to 54,349.12, whereas the Nasdaq composite dropped by 0.8% to 26,363.44. Alphabet, Google’s parent company, saw its shares decline by 4%, and Microsoft fell by 1.1% amid losses in major technology firms.

The market trend remains positive overall, driven by robust earnings reports. Approximately three-quarters of companies in the S&P 500 have reported results, with projected profit growth of 50%. Walt Disney Co. shares climbed 3.6%, fueled by strong profit performance from its entertainment ventures. Booking Holdings surged 6.6% supported by robust travel demand.

SpaceX, led by Elon Musk, experienced a 13.6% drop after its first public quarterly report revealed increased investments in artificial intelligence. However, Nvidia benefited from a 3.4% rise in its shares after SpaceX announced exclusive use of its chips for AI applications. Musk previously indicated plans to use chips from both Nvidia and Advanced Micro Devices for SpaceX and Tesla.

Inflation remains a concern for markets and the Federal Reserve. The central bank is keeping its benchmark rate stable to monitor the impact on the economy. In early Thursday trading, the dollar shifted to 157.73 Japanese yen from 157.77 yen. The euro dropped slightly to $1.1549 from $1.1555.

Associated Press writer Damian J. Troise contributed to this report.