SK Hynix, Samsung Electronics lead losses as Asian stocks retreat on US tech sell-off

ASIAN equities declined as investors cut exposure to technology shares ahead of earnings this week that will test confidence in the artificial intelligence trade.

The MSCI Asia Pacific equities gauge slipped 0.5 per cent, with South Korean chip bellwethers SK Hynix and Samsung Electronics contributing most to the decline.

Among the main market moves, S&P 500 futures were unchanged as at 11.10 am Tokyo time.

Japan’s Topix was little changed, Australia’s S&P/ASX 200 rose 0.6 per cent, Hong Kong’s Hang Seng fell 0.3 per cent and the Shanghai Composite fell 0.2 per cent.

The losses followed a sell-off in semiconductor giants on Wall Street that dragged the Nasdaq 100 Index down nearly 1 per cent on Monday (Aug 24), while Nvidia posted its longest losing streak since 2022.

Elsewhere, global oil benchmark Brent recouped some of Monday’s losses, rising 0.6 per cent to about US$92.70 a barrel after US Treasury Secretary Scott Bessent threatened economic punishment against countries doing business with Iran.

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

Gold erased earlier gains and slipped 0.2 per cent to about US$4,640 an ounce.

The commodity had climbed to levels last seen in May as the US Treasury’s intervention in the bond market revived concern about widening US deficits and their impact on the US dollar.

SEE ALSO

US widens Iran sanctions but holds back toughest measures; Teheran vows to retaliate

Oil steadies as investors weigh impact of latest US sanctions on Iran

Nvidia customers face AI server price hikes of more than 15% as memory costs soar

Treasuries steadied with the 10-year yield at 4.71 per cent after dropping four basis points in US trading.

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 due 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.”

Nvidia’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.

“Gold is enjoying a buoyant month as investors build hedges against the risk of a long-term decline in the US dollar. The revival in cryptocurrencies points to the same concern over the greenback’s outlook,” said Mark Cranfield, markets live strategist at Bloomberg.  

In other corners of the market, a Bloomberg gauge of the US dollar held its gains from Monday.

The greenback had strengthened after Bessent said the US will cut Iran off from the global financial system, underscoring the US currency’s central role in trade and boosting its haven appeal.

Bitcoin rose for a third day, climbing above US$79.500. The Canadian dollar was little changed after Canadian ministers were set to announce a response to US tariffs on Tuesday.

Investors will be looking for clues on how the US central bank will respond to stubborn inflation when Federal Reserve chair Kevin Warsh speaks on Friday 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