Asian stocks slip after AI valuation fears spark Wall Street chip selloff

ASIAN stocks fell alongside US equity-index futures as a sell-off in chipmakers deepened with investors questioning whether they had rallied too far and too fast earlier in 2026. Oil climbed.

MSCI’s Asia-Pacific equities gauge dropped 2.1 per cent, with Japan’s Nikkei 225 Stock Average losing 4.4 per cent.

Among the main market moves, the S&P 500 futures fell 0.5 per cent as at 12.29 pm Tokyo time.

The Nikkei 225 futures (OSE) fell 3.6 per cent, Japan’s Topix dropped 2.6 per cent, Australia’s S&P/ASX 200 slid 0.5 per cent, Hong Kong’s Hang Seng declined 1.9 per cent and the Shanghai Composite retreated 1.7 per cent.

Taiwan Semiconductor Manufacturing dropped more than 4 per cent as the chip bellwether’s solid earnings outlook was overshadowed by a higher spending forecast. Kioxia sank by 15 per cent in Tokyo, halving its market capitalisation in just a month.

Netflix also weighed on sentiment, with shares falling 9 per cent in extended trading after the company forecast a second straight quarter of slowing sales growth.

Equity-index futures for the Nasdaq 100 Index retreated almost 1 per cent. 

Elsewhere, Brent rebounded from Thursday’s losses as hostilities across the Middle East continued to escalate and shipping traffic slumped in the Strait of Hormuz.

The commodity traded just below US$85 a barrel and was up 12 per cent for the week, on track for its biggest weekly gain since April and rekindling inflation concerns.

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Technology stocks have come under pressure in recent weeks as investors increasingly question whether this year’s blistering artificial intelligence-driven rally has run too far, too fast.

While softer US inflation has eased expectations of an immediate Federal Reserve interest rate hike and Middle East tensions continue to drive oil prices, the focus remains on AI earnings for evidence that billions of dollars in spending will translate into returns.

“Capex guidance comes into focus again as investors get increasingly sceptical on whether growth can be achieved sustainably while maintaining a healthy balance sheet,” said Fabien Yip, a market analyst at IG International.

“We expect the market to continue to experience volatility during the earning season, but this is unlikely to be an end to the AI story.”

In other corners of the market, government bonds edged lower in Australia and Japan. Treasuries were little changed, with the yield on the benchmark 10-year holding at 4.55 per cent.

The yen traded around 162.45 per US dollar even as Japan’s Finance Minister Satsuki Katayama renewed her warning of possible intervention in the market as the currency continued to hover near its lowest level in four decades.

Gold was on track for its biggest weekly loss since early June as renewed hostilities in the Middle East and rising oil prices fuelled speculation that the Federal Reserve may keep interest rates higher for longer.

The US dollar was a touch stronger against most of its major peers.

That was due to a combination of the selloff in technology stocks, rising energy prices, and higher US real yields, said Chidu Narayanan, chief Asia-Pacific strategist at Wells Fargo in Singapore.

“US data is not ‘hot’, but it is strong enough to support the (greenback) even as other factors are leaning towards marginal dollar strength,” he said. BLOOMBERG