1 week ago
Asian stocks slide as technology sell-off deepens before Nvidia earnings
Asian stock markets fell after technology shares dropped in the United States.
South Korea’s KOSPI lost more than 3%, while Japan’s Nikkei also declined.
Nvidia’s stock fell for the seventh day in a row.
Investors are waiting for Nvidia’s earnings report on Wednesday.
They want to know whether companies are making enough money from large investments in artificial intelligence.
Oil prices were mostly steady after falling the day before.
Government bonds received some support as oil prices retreated.
Markets are also watching inflation, government borrowing, and tensions involving Iran.
The MSCI Asia Pacific Index fell 0.4% on Tuesday, August 25, extending Wall Street’s technology-led decline.
South Korea’s KOSPI dropped 3.37%, Japan’s Nikkei 225 fell 0.93%, and the TOPIX gained 0.015%.
Nvidia shares declined 2.9% for a seventh straight session after the company said it would raise prices for some AI systems shipping early next year.
Investors are watching Nvidia’s Wednesday earnings for evidence of whether artificial-intelligence spending can generate matching profits.
Brent crude hovered near $92 a barrel while bond yields remained elevated amid inflation, deficit, and geopolitical concerns.
- Who
- Asian investors, technology companies including Nvidia, and traders in global stock, bond, and commodity markets.
- What
- Asian stocks declined as a technology sell-off deepened ahead of Nvidia’s earnings report.
- Where
- Asian markets, following a decline on Wall Street; the article also discusses United States markets and Treasury securities.
- When
- Tuesday, August 25, with Nvidia’s earnings due Wednesday.
- Why
- Investors reduced technology holdings amid concerns that heavy artificial-intelligence spending may not produce matching profits, while also weighing economic data, earnings, inflation, fiscal deficits, and geopolitical risks.
Reasons for Caution
Reasons for Support
Artificial-intelligence investment
Reasons for Caution
Investors are concerned that heavy spending on artificial intelligence may not deliver matching profits, contributing to the technology sell-off.
Reasons for Support
Nvidia’s upcoming earnings could provide evidence that demand for AI systems and related spending remains strong.
U.S. Treasury bond buybacks
Reasons for Caution
Persistent inflation and fiscal-deficit concerns have kept Treasury yields elevated, while Treasury Secretary Scott Bessent declined to confirm an expanded buyback strategy.
Reasons for Support
A CNBC report said the Treasury Department could use cash reserves to buy back older, higher-yielding securities, potentially helping contain borrowing costs.
Geopolitical and energy risks
Reasons for Caution
Bessent warned of economic penalties against nations trading with Iran, adding to geopolitical uncertainty.
Reasons for Support
The retreat in energy prices helped support U.S. Treasuries, although Brent crude was little changed after its previous decline.
Key facts
- Regional index
- The MSCI Asia Pacific Index dropped 0.4%.
- Largest stock-market decline
- South Korea’s KOSPI tumbled 3.37%.
- Nvidia performance
- Nvidia shares fell 2.9%, extending their losing streak to seven sessions.
- Nvidia earnings
- The company’s earnings were due Wednesday and were viewed as a key test of confidence in the AI rally.
- Oil prices
- Brent crude hovered near $92 a barrel, while West Texas Intermediate rose 0.3% to $85.23.
- Treasury yields
- The U.S. 10-year Treasury yield fell four basis points to 4.70% on Monday.
- Currency levels
- The Japanese yen stood at 159.11 per dollar and the offshore yuan at 6.7201 per dollar.
Sources
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