Asian markets experienced a mostly downward trend on Wednesday following a retreat in U.S. stocks, primarily driven by selling in the technology and energy sectors. Tokyo’s Nikkei 225 index led the declines, falling 1.8% to 39,210.61, as tech stocks plummeted after Dutch computer chip equipment supplier ASML warned of a slower recovery in demand for semiconductors outside of the AI boom. This news caused chip maker Tokyo Electron to drop 9.8% and Lasertec Corp., a chip inspection equipment manufacturer, to lose 13.4%.
Australia’s S&P/ASX 200 slipped 0.2% to 8,301.80, while Seoul’s Kospi shed 0.4% to 2,622.27. Taiwan’s Taiex also experienced a decline of 0.5%. India’s Sensex lost 0.2%. However, Chinese shares rebounded after recent losses, with Hong Kong’s Hang Seng surging 0.9% to 20,501.77 and the Shanghai Composite index gaining 0.4% to 3,214.01.
On Tuesday, Wall Street pulled back from its record highs, with the S&P 500 falling 0.8% to 5,815.26, the Dow Jones Industrial Average dropping 0.8% to 42,740.42, and the Nasdaq composite sinking 1% to 18,315.59. Energy stocks, including Exxon Mobil, experienced significant losses after oil prices dropped more than 4%. The decline in crude prices is attributed to concerns about China’s slowing economic growth and the receding worries of a potential attack by Israel on Iranian oil facilities.
However, oil prices recovered in early Wednesday trading, with benchmark U.S. crude oil up 29 cents at $70.86 per barrel, and Brent crude gaining 26 cents to $74.51 per barrel.
Nvidia, the heaviest weight on the S&P 500, fell 4.5%. Although the chip company’s stock is still up 166.2% for the year, concerns have arisen about new restrictions on chip exports to specific countries, particularly targeting Nvidia and AMD, due to national security concerns.
Traders are closely watching for an earnings report from Taiwan Semiconductor Manufacturing Corp. (TMSC), scheduled for Thursday. TMSC’s shares fell 1.9% on Wednesday. U.S. chipmaker Wolfspeed, on the other hand, saw a significant jump of 21.3% after the Biden-Harris administration announced plans to provide up to $750 million in direct funding to support its new silicon carbide factory in North Carolina.
In other market news, Charles Schwab saw a 6.1% increase in its stock as more customers opened brokerage accounts, bringing its total client assets to a record $9.92 trillion. Bank of America also added 0.5%, with CEO Brian Moynihan attributing the company’s success to higher average loans and fees for investment banking and asset management. Walgreens Boots Alliance experienced a notable gain of 15.8% after surpassing analysts’ forecasts. The drugstore chain also announced plans to close approximately 1,200 locations over the next three years to revitalize its struggling U.S. business.
In the bond market, trading of Treasurys resumed after a holiday on Monday, and yields sank following a weaker-than-expected report on manufacturing in New York state. The yield on the 10-year Treasury fell to 4.03% from 4.10% late Friday.