Asian markets endured a volatile session on Tuesday morning after a sharp wave of selling in technology and artificial intelligence shares pushed major regional indexes lower, according to Walla. The hardest hit was South Korea, where the KOSPI fell by almost 10% during trading and triggered the exchange’s circuit breaker twice, a mechanism designed for extreme volatility.
The declines followed recent weakness on Wall Street, where the biggest tech stocks led losses in recent days. Investors who had benefited from the surge in AI-related shares began taking profits amid worries that interest rates in the United States will stay high longer than expected. U.S. futures also pointed to continued pressure, with Nasdaq futures down more than 2% before the open and S&P 500 futures off about 1.2%.
Markets are now waiting for earnings from major chip companies, including Micron and Cerebras Systems, which may offer a clearer read on demand in the AI sector. Another drag is the Federal Reserve’s stance, after the central bank signaled last week that it is in no hurry to cut rates, prompting traders to scale back expectations for deep cuts later this year. Investors are also awaiting the PCE inflation gauge, the Fed’s preferred measure, because a hotter-than-expected reading could reinforce the view that rates will stay elevated.
Oil prices offered some support after Brent fell to around $78 a barrel on signs of progress in U.S.-Iran talks and reduced fears of disruptions in the Strait of Hormuz. Despite the sharp losses, many analysts still see the move as profit-taking after a strong AI rally rather than the end of the trend, though they expect high valuations, rate uncertainty and geopolitical tensions to keep markets choppy in the near term.
