(Feb 24): Asian shares mostly bucked a US sell-off sparked by anxiety over the impact of artificial intelligence (AI) on company profits that rattled Wall Street. Gold and silver fell.
The MSCI Asia-Pacific Index swung between small gains and losses on Tuesday, with equities rising in Japan, which returned after a break on Monday. Shares in South Korea — a bellwether of AI investments — pared initial losses to trade 1.1% higher. Gauges in China rose as they returned after the Lunar New Year holidays.
The moves in Asia — where markets have outperformed the US this year and largely avoided tech-related sell-offs — followed a drop in the US on Monday. Tech, delivery and payment shares slid after Citrini Research outlined potential AI risks across industries.
Asian markets are outperforming the US and Europe, drawing global investors into AI supply-chain names such as chipmakers in South Korea and Taiwan. By contrast, US equities are under pressure as lingering uncertainty over US President Donald Trump’s tariffs and fears of AI-driven disruption prompt traders to shed shares of companies seen as vulnerable to displacement.
“The software sell-off is a reminder of what can happen when momentum-driven sectors shift into reverse,” said Steve Sosnick at Interactive Brokers. “The broader, more important question is: How many sectors can go into reverse before they drag the broader market along with them?”
See also: Asian stocks climb but gains tempered by muted response to Nvidia's upbeat sales forecast
While software companies have been among the hardest hit, insurance brokers, private credit firms, cybersecurity and even real estate services stocks in the US have all been caught up in the so-called AI scare trade.
On the other hand, Asian shares have outperformed, with MSCI’s regional gauge rising 12% this year compared with a 0.1% decline in the S&P 500 over the same period. That marks the index’s strongest start to a year relative to the US benchmark on record.
Governments should consider taxing incremental or windfall gains from AI to help offset the impact of job losses, according to Alap Shah, the chief investment officer of Lotus Technology Management and co-author of the Citrini Research report highlighting potential tech disruption.
See also: Asian stocks rise after tech-led rebound in US
In an interview with Bloomberg TV, Shaw said he saw semiconductors, data centres and foundation labs as among the main beneficiaries of the AI trade. Shares of South Korea’s SK Hynix Inc jumped 4.2%.
In other corners of the market, Treasuries broadly held their gains from the US session. Bitcoin extended declines to trade below US$65,000 ($82,356). The dollar edged higher, while gold fell over 1% and silver slipped 2.5% on Tuesday. Bullion was near US$5,230 an ounce in early trading, having advanced more than 7% over the previous four sessions.
In other commodities, oil steadied as Trump said his preference was for a nuclear deal with Iran ahead of talks between the two nations this week.
Meanwhile, questions over US tariffs added to the downbeat mood on Monday.
After the Supreme Court’s decision last Friday to nix Trump’s “reciprocal” tariffs, the White House announced plans to replace the prior levies with a new, across-the-board 15% tariff on US imports. The European Union froze ratification of its US trade deal amid the uncertainty.
The US is readying a spate of additional national security investigations that would enable Trump to impose new tariffs, as the administration seeks to rebuild his global tariff regime.
The administration is considering new national security tariffs on a half-dozen industries, The Wall Street Journal reported, citing people familiar with the plans.
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“The push and pull with tariffs is likely to be a distracting theme for markets for the remainder of the year, albeit with less volatility than the initial shock last April,” said Michael Landsberg at Landsberg Bennett Private Wealth Management.
Corporate highlights:
- JPMorgan Chase & Co expects to earn about US$104.5 billion in net interest income this year, more than it anticipated just last month when it reported quarterly earnings.
- Anthropic PBC chief executive officer Dario Amodei will meet with US Defense Secretary Pete Hegseth on Tuesday, according to a senior Pentagon official, as contract talks with the AI start-up remain deadlocked over the company’s insistence on guardrails for use of its technology.
- Anthropic said three leading AI developers in China worked to “illicitly extract” results from its AI models to bolster the capabilities of rival products.
Some of the main moves in markets:
Stocks
- S&P 500 futures were 0.2% higher as of 10.59am Tokyo time on Tuesday
- Japan’s Topix rose 0.2%
- Australia’s S&P/ASX 200 fell 0.3%
- Hong Kong’s Hang Seng fell 1.8%
- The Shanghai Composite rose 0.6%
- Euro Stoxx 50 futures rose 0.2%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at US$1.1780
- The Japanese yen fell 0.2% to 155.01 per dollar
- The offshore yuan was little changed at 6.8940 per dollar
Cryptocurrencies
- Bitcoin fell 0.7% to US$64,125.27
- Ether fell 1.1% to US$1,842.31
Bonds
- The yield on 10-year Treasuries advanced one basis point to 4.04%
- Japan’s 10-year yield declined one basis point to 2.095%
- Australia’s 10-year yield declined two basis points to 4.70%
Commodities
- West Texas Intermediate crude rose 0.2% to US$66.42 a barrel
- Spot gold fell 1% to US$5,174.13 an ounce
Uploaded by Tham Yek Lee
