On Friday, Asian stock markets experienced significant declines. Tokyo’s Nikkei 225 fell 4%, affected by substantial selling in the computer chip and AI sectors. South Korean markets were closed, but Taiwan’s stocks dropped 6.5% following TSMC’s announcement of plans to invest an additional $100 billion in U.S. chip fabrication plants. TSMC itself decreased by 7.3%.
The technology sector faces pressure due to concerns that prices for AI-related shares have become overstretched. There’s uncertainty about the long-term profitability of AI, which might affect demand for computer memory and processors.
Oil prices rose as conflicts in the Middle East intensified. U.S. expanded airstrikes against Iran targeted infrastructure to exert pressure over the Strait of Hormuz. In Japan, the Nikkei index dropped to 64,141.12, with Tokyo Electron’s shares down 8.2%. Advantest and SoftBank Group also saw declines of 7.2% and 9% respectively.
Hong Kong’s Hang Seng index fell by 2% to 24,501.89, while Shanghai Composite decreased by 3.1% to 3,764.15. Australia’s S&P/ASX 200 saw a smaller decline of 0.5% to 8,796.70.
Stephen Innes from SPI Asset Management noted that investors are moving profits from sectors with earlier successes to others that had not performed as well. The S&P 500 dropped 0.5%, despite positive earnings from major companies. The Dow Jones fell 0.2%, and the Nasdaq composite lost 1.5%. Nvidia, among other AI-related stocks, experienced a 2.4% decline.
Other notable changes included Micron Technology’s 5.6% drop and SanDisk’s 12.6% decrease. Western Digital fell by 9.2% but all retained substantial gains on the year.
Concerns about the impact of conflict on oil shipping routes, especially in the Strait of Hormuz, contributed to rising oil prices. Brent crude climbed 1.1% to $85.13 per barrel. U.S. benchmark crude increased by 1.3% to $79.95 per barrel.
Mixed economic reports from the U.S. showed consumers spending less than expected, while fewer workers claimed unemployment benefits, indicating a stable job market. Manufacturing in the mid-Atlantic region also exceeded expectations.
Currency movements early Friday saw the U.S. dollar fall to 162.19 yen from 162.38 yen, and the euro increased to $1.1452 from $1.1443.
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