Asian Stocks Decline as Big Tech Weighs Down Markets

Asian shares mostly fell with South Korea’s Kospi dropping over 4% on Thursday. This follows declines in major tech companies, such as SK Hynix. Brent crude oil remained steady around $79 per barrel. Markets are uncertain due to U.S. tensions with Iran, despite hopes for reopening the Strait of Hormuz.

Investors are awaiting a U.S. jobs update with Friday’s employment report for July. Analysts suggest the market is preparing for possible impacts. Stephen Innes from SPI Asset Management noted that Asia’s chip selloff might be impacted by profit-taking and risk reduction ahead of the U.S. payroll report.

U.S. stocks have been rising due to strong corporate profits and growth expectations. However, Asian markets faced selling in sectors linked to artificial intelligence. SK Hynix’s share fell 9.7%, while Samsung Electronics declined by 6.1%, contributing to a 4.5% drop in Kospi to 6,306.40.

Japan’s Nikkei 225 lost 1.2% to 65,538.44. In Hong Kong, the Hang Seng index fell 1.8% to 25,463.51. The Shanghai Composite index remained nearly unchanged at 3,878.92. Meanwhile, Australia’s S&P/ASX 200 rose 0.5%.

U.S. President Donald Trump announced upcoming developments to reopen the Strait of Hormuz. However, the conflict lasting five months has disrupted global oil supplies. Brent crude dropped by 0.3% to $79.24 per barrel. During the conflict, oil prices peaked at $102 per barrel, contributing to inflation by raising gasoline and shipping costs. U.S. benchmark crude decreased 0.4% to $74.93 per barrel.

On Wednesday, the S&P 500 slipped 0.2% from its all-time high, closing at 7,723.55. The Dow industrials increased by 0.5% to 54,349.12, while the Nasdaq composite fell 0.8% to 26,363.44.

Tech companies experienced losses, including Alphabet, which dropped 4%, and Microsoft, which fell 1.1%. The market continues to rise as companies near the end of earnings reports. Three-quarters of S&P 500 companies have reported results, with expected profit growth of 50%.

The Walt Disney Co. saw a 3.6% increase after surpassing profit estimates, driven by a $1 billion box office success with ‘Toy Story 5’ and theme park revenue. Booking Holdings rose 6.6% due to strong travel demand driving profits and revenue.

SpaceX shares dropped 13.6% after releasing its first quarterly report showing increased spending on artificial intelligence. This announcement provided a 3.4% boost to Nvidia, as SpaceX plans to use Nvidia chips for AI technology. Although Musk had considered using Advanced Micro Devices, the focus remains on Nvidia.

Inflation worries affect markets and the Federal Reserve, with the benchmark rate held steady as its economic impact is monitored. On Thursday, the dollar shifted to 157.73 yen, from 157.77 yen. The euro decreased to $1.1549 from $1.1555.