(Bloomberg) — Asian equities came under pressure after a tech selloff hit Wall Street Friday, with chip shares among the losers. Hong Kong was an outlier as Alibaba Group Holding Ltd. surged.
Stocks in Japan and South Korea declined. Samsung Electronics Co. and SK Hynix Inc. slid after the US Commerce Department removed the companies from the list of entities authorized to move some goods from China without a license. Chipmakers in Japan retreated as well. Alibaba jumped as much as 19% after a surge in revenue from China’s AI boom.
Equity-index futures for US rose 0.2% after a federal appeals court ruling that President Donald Trump’s sweeping trade tariffs were illegal. US markets are closed Monday for the Labor Day holiday. Brent crude fell 1.2% while silver reached its highest since 2011. Southeast Asian markets are also in focus amid political crises in Indonesia and Thailand.
The Trump administration’s move will make it harder for companies to ship equipment to chipmaking operations in China, threatening production in the world’s largest semiconductor market. Investors must also contend with uncertainty over the president’s tariff campaign after a federal court ruled his global levies — which weigh heavily on Asia — were illegally imposed. For now, the duties remain in place.
“It’s simply the US impact today,” said Hiroyuki Ueno, chief strategist at Sumitomo Mitsui Trust Asset Management. “There’s been a strong sense of ‘watch out for the highs’ since August started. Some investors already felt valuations were stretched, then prices climbed anyway, so it’s been hard for them to keep up.”
It’s a crucial time for equities and the next few weeks will give Wall Street a clear reading on whether the stock market rally will continue — or if it’s doomed to get derailed.
Jobs reports, a key inflation reading and the Federal Reserve’s interest rate decision all hit over the next 14 trading sessions, setting the tone for investors as they return from summer vacations.
The events arrive with stock market seemingly at a crossroads as the S&P 500 Index heads into September, historically its worst month of the year.
September’s record remains on traders’ minds “but few managers will liquidate core holdings on seasonality alone,” Chris Weston, head of research at Pepperstone Group, wrote in a note.
“It seems unlikely that, simply because we’ve moved into September, we’ll suddenly see a radical shift in conditions — especially as the macro environment hasn’t meaningfully changed,” he wrote.
Political risks in Southeast Asian markets are also back in focus. Indonesia’s President Prabowo Subianto canceled a trip to China after deadly unrest over living costs and inequality, with protesters targeting the finance minister and several lawmakers. In Thailand, parties are jockeying to form the next government following the disqualification of Prime Minister Paetongtarn Shinawatra.
US stocks slid on Friday amid a selloff in tech shares, led by Nvidia Corp., while Dell Technologies Inc. sank amid tighter profit margins on servers. AI infrastructure shares slid as Marvell Technology Inc.’s outlook raised concern about data-center equipment demand. The slide came despite inflation data that did little to alter bets on Fed rate cuts.
Meanwhile, Fed Bank of San Francisco President Mary Daly suggested policymakers will be ready to lower interest rates soon, adding that inflation stemming from tariffs will likely prove temporary.
In commodities, oil declined after capping a monthly drop, with traders focused on concerns over a potential glut and geopolitical tensions. Traders are assessing whether India will yield to US pressure to end crude imports from Russia after Washington imposed secondary tariffs against the South Asian nation.
Corporate News:
Alibaba Group Holding Ltd. reported a surge in revenue from China’s AI boom, helping assuage investors nervous about the fallout from a worsening battle with Meituan and JD.com Inc. in internet commerce. BYD Co. shares fell after reporting a staggering 30% plunge in quarterly profit last Friday, its first decline in over three years, it’s become clear that not even dominant players are safe in the cutthroat battle for market share. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.2% as of 10:56 a.m. Tokyo time Japan’s Topix fell 0.6% Australia’s S&P/ASX 200 fell 0.5% Hong Kong’s Hang Seng rose 1.8% The Shanghai Composite was little changed Euro Stoxx 50 futures rose 0.2% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1694 The Japanese yen fell 0.2% to 147.29 per dollar The offshore yuan was little changed at 7.1254 per dollar Cryptocurrencies
Bitcoin fell 0.9% to $108,115.67 Ether fell 0.9% to $4,417 Bonds
Japan’s 10-year yield advanced 1.5 basis points to 1.615% Australia’s 10-year yield advanced three basis points to 4.31% Commodities
West Texas Intermediate crude fell 0.4% to $63.73 a barrel Spot gold rose 0.1% to $3,451.46 an ounce This story was produced with the assistance of Bloomberg Automation.
-With assistance from Aya Wagatsuma and Matthew Burgess.
