Asian stocks retreat on US tech sell-off as chipmakers lead losses

ASIAN equities followed Wall Street lower as investors cut exposure to technology shares ahead of earnings that may test confidence in the artificial intelligence trade, as gold climbed for a fifth consecutive day.

The MSCI Asia Pacific equities gauge slipped 0.4 per cent, with chip stocks SK Hynix, Samsung Electronics and Advantest contributing most to the decline.

Among the main market moves, the S&P 500 futures were little changed as at 9.52 am Tokyo time.

Meanwhile, the Hang Seng futures rose 0.6 per cent, the Nikkei 225 futures (OSE) fell 0.5 per cent, Japan’s Topix was little changed and Australia’s S&P/ASX 200 rose 0.5 per cent.

The losses followed a sell-off in semiconductor giants that dragged the Nasdaq 100 Index down nearly 1 per cent on Monday (Aug 24). Nvidia fell for a seventh straight session – the longest losing streak since 2022.

Elsewhere, global oil benchmark Brent edged lower on Tuesday, trading around US$92 a barrel after US Treasury Secretary Scott Bessent threatened economic punishment against any country doing business with Iran.

The commodity fell more than 2 per cent on Monday, snapping a six-day rally.

Treasuries held Monday’s gains, with the 10-year yield at 4.7 per cent after dropping four basis points.

Gold rose 0.9 per cent to near US$4,695 an ounce, hovering around levels last seen in May as the US Treasury’s intervention in the bond market revived concerns about fiscal policy and its impact on the US dollar.

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Investors are weighing mounting geopolitical risks against a packed week of economic data and corporate earnings, with the outlook for technology shares emerging as a key test for broader risk sentiment.

Nvidia’s results on Wednesday will be closely watched for signs that the recent weakness in chipmakers has further to run.

“Details about US economic sanctions on Iran, the Treasury’s attempts to lower long-term yields, and economic data may shape much of the sentiment backdrop,” said Chris Larkin at E*Trade from Morgan Stanley.

“But Nvidia and other tech earnings are positioned to be a major weight on the market’s momentum scale.”

In other corners of the market, a Bloomberg gauge of the US dollar held its gains from Monday. Bitcoin continued its recent rally, climbing to over US$79,500. 

The Canadian dollar was little changed after Canadian ministers were set to announce a response to US tariffs on Tuesday.

Nvidia shares fell 2.9 per cent after the company had notified customers of AI-related price increases on systems shipped early 2027.

The company’s results have become an important gauge of the AI trade, which has come under pressure in recent months as investors question whether massive spending on the technology will translate into commensurate profits.

Investors are also looking for clues on how the US central bank will respond to stubborn inflation when Federal Reserve chair Kevin Warsh speaks at its annual gathering in Jackson Hole, Wyoming.

With Treasury yields still elevated by sticky inflation and concerns over fiscal deficits, traders are watching for any clear guidance from Warsh on how the Fed might respond over the rest of 2026.

“This is a key week for markets with Nvidia’s earnings and the annual Jackson Hole speech,” said Richard Reyle, chief investment officer at Questar Capital Partners.

The two events “normally wouldn’t have a link, but Nvidia needs to impress in order to keep one leg of the stock market stable, and Warsh needs to provide clarity on interest rates in order to keep the other leg of the stock market stable”.

Earlier, Treasuries were supported by a CNBC report that the Treasury Department could tap its cash pile to fund buybacks of higher-yielding older securities in an effort to curb borrowing costs.

Bessent, however, stopped short of signalling any changes to US debt management in a speech on Monday following the report.

“We haven’t bought a single bond yet,” Bessent said when asked in a press conference whether he is going to soon increase the buybacks. BLOOMBERG