Asian stocks had a mixed performance on Monday. South Korea’s Kospi took a significant hit, dropping 4.9% to 6,490.97 due to a sell-off in artificial intelligence-related stocks. The downturn was driven by losses in major stocks like Samsung Electronics, which fell 4.4%, and SK Hynix, which decreased by 3.3%.
Japan’s markets were closed for a holiday, impacting overall regional activity. Meanwhile, U.S. futures showed varied results. Oil prices surged more than 2%, with Brent crude surpassing $90 per barrel. This increase occurred as tensions heightened between the U.S. and Iran, with the U.S. conducting strikes for nine consecutive nights. Iran retaliated by targeting U.S. allies in the Middle East.
The escalation between the U.S. and Iran is causing concern. ING commodities experts Warren Patterson and Ewa Manthey noted the potential for widespread attacks in the Persian Gulf area if the situation continues unchecked. The crucial Strait of Hormuz is experiencing reduced tanker traffic, adding pressure on oil supplies.
In Taiwan, the Taiex index showed a slight dip, influenced by AI-related stocks. Taiwan Semiconductor Manufacturing Co. saw a 2% increase despite a previous decline after its announcement of a $100 billion investment to boost U.S. chip production.
Hong Kong’s Hang Seng index climbed 2.1% to 25,105.78, and China’s Shanghai Composite rose 1.2% to 3,808.39. Australia’s S&P/ASX 200 experienced a modest growth of 0.2% to reach 8,815.30, while India’s Sensex decreased by 0.9%.
The AI sector faces uncertainty as concerns of a market bubble grow. Investors are selling to secure profits after substantial rises in AI stock values. Additionally, the emergence of a new Chinese AI model from Moonshot AI is creating ripples overseas, echoing past movements like China’s DeepSeek.
In the U.S., the S&P 500 concluded the week down 1% at 7,457.69. Dow Jones Industrial Average slipped 0.8% to 52,146.42, and Nasdaq, focused on technology, went down 1.4% to 25,520.24. Chipmaking stock prices fell, seeing Nvidia drop 2.2%, and declines in Broadcom and AMD of 1% each.
SpaceX, the rocket company led by Elon Musk, experienced a significant drop, falling 5.4% and dropping below its IPO price.
In currency trading, the U.S. dollar weakened to 162.37 Japanese yen, while the euro saw a slight rise to $1.1446.