Asian shares were mostly down, with South Korea’s Kospi plummeting over 4% on Thursday. The decline followed a downturn for several Big Tech companies, particularly memory chipmaker SK Hynix. Oil prices remained steady; Brent crude traded near $79 per barrel.
There is still uncertainty surrounding the U.S. situation with Iran, impacting markets even as hopes grow for reopening the Strait of Hormuz. Analysts note that investors are likely preparing for the possible effects of the U.S. jobs report due on Friday. “Asia’s chip selloff seems a mix of profit-taking and risk reduction before Friday’s nonfarm payroll report,” commented Stephen Innes of SPI Asset Management.
Despite strong corporate earnings and expected growth driving U.S. stocks upward, Asian benchmarks experienced sell-offs, particularly in the computer chipmaking sector. SK Hynix experienced a 9.7% drop, with Samsung Electronics facing a 6.1% decrease. The Kospi index fell 4.5% to 6,306.40. Japan’s Nikkei 225 lost 1.2% to 65,538.44. In Hong Kong, the Hang Seng dropped 1.8% to 25,463.51, while the Shanghai Composite index stayed nearly unchanged at 3,878.92. Australia’s S&P/ASX 200 rose 0.5%.
President Donald Trump indicated that a deal to reopen the Strait of Hormuz might be coming soon, yet numerous delays have occurred in the ongoing five-month conflict. This conflict has hindered global oil supply and disturbed energy markets. Brent crude, the international benchmark, fell 0.3% to $79.24 per barrel. U.S. benchmark crude oil saw a 0.4% decline to $74.93 a barrel. The conflict has led to oil prices reaching up to $102 per barrel, affecting inflation and increasing costs for gasoline and shipping.
On Wednesday, the S&P 500 slipped 0.2% from a peak to close at 7,723.55. The Dow increased by 0.5% to 54,349.12, while the Nasdaq composite fell 0.8% to 26,363.44. Notably, Alphabet, Google’s parent company, fell 4%. Microsoft also saw a decline of 1.1%.
Overall, the market has been gaining as companies near the end of their current earnings reports cycle with strong gains. Three-quarters of S&P 500 companies have reported so far, with Wall Street anticipating a 50% profit growth by the time all reports are in.
The Walt Disney Co. gained 3.6% after surpassing profit expectations led by “Toy Story 5” earnings and theme park revenue. Booking Holdings reported robust travel demand, boosting its profit and revenue, leading to a 6.6% increase.
SpaceX, under Elon Musk, fell 13.6% post the release of its quarterly public report, revealing increased spending on artificial intelligence. This move benefitted Nvidia with a 3.4% rise, as SpaceX announced it would exclusively utilize Nvidia’s chips for AI. Musk had previously said he would source chips from both Nvidia and Advanced Micro Devices for SpaceX and Tesla.
Markets are still grappling with inflation concerns, as the Federal Reserve maintains steady interest rates while evaluating economic conditions. Early on Thursday, the dollar shifted to 157.73 Japanese yen from 157.77 yen, while the euro decreased to $1.1549 from $1.1555.
Associated Press writer Damian J. Troise contributed.