This content was published on
July 7, 2026 - 07:06
5 minutes
(Bloomberg) — Asian equities fell as renewed selling in technology stocks deepened concerns that the AI-driven rally may have run ahead of itself.The MSCI Asia Pacific Index dropped 2%, with the chip sector coming under pressure. Samsung Electronics Co., whose shares have more than doubled this year, slid 10% despite reporting a 19-fold jump in profit. SK Hynix Inc. also fell 10% after kicking off the marketing process for its US listing, pushing Korea’s Kospi Index down 8% and triggering a temporary trading halt.Futures for the tech-heavy Nasdaq 100 Index retreated 1.1%, suggesting Monday’s rebound on Wall Street was losing momentum. European shares were also set for losses.Elsewhere, Brent crude rose 0.7% to about $72.50 a barrel after a laden liquefied natural gas carrier was struck by a projectile near the Omani coast as it exited the Strait of Hormuz, a fresh attack that tests the late-June peace deal. Treasuries edged lower across the curve, with the yield on the 10-year rising one basis point to 4.48%.Investors are increasingly rotating out of tech stocks and into other sectors as they reassess the next phase of the AI trade. While enthusiasm for the AI technology remains intact after US semiconductor shares posted a record quarter, attention has shifted to whether rising capital spending, intensifying competition and expanding capacity will generate the earnings growth needed to support elevated valuations.“The market is in the process of leveling the valuation playing field,” said Tim Waterer, chief market analyst at KCM Trade. “After semiconductors stole the show for months, investors are now spreading their bets into other areas offering better value, which is tempering the earlier euphoria in high-beta tech names.”This shift may persist until valuations between high-flying semiconductor companies and the broader market become more balanced, Waterer said.Elsewhere, the yen was a touch stronger around 161.81 per dollar even as positioning data showed hedge funds turned the most negative on the Japanese currency since 2007. Gold slipped for a second day to around $4,130 an ounce, while a Bloomberg gauge of the dollar was little changed.What Bloomberg Strategists Say…“The Kospi index is adjacent to its 50-day moving average, which was a buying zone for retail investors in late March. However, this time around there isn’t the same one-sided view that everything touching AI themes is a sure win.”— Mark Cranfield, MLIV strategist. For full analysis, click here.In Asia, attention was squarely on Samsung’s earnings. The company’s quarterly profit soared past elevated expectations due to rocketing demand for memory chips needed in AI data centers. Still, investors have become skeptical on the AI boom after massive gains.Daily headlines on capacity additions, tech delays and rising debt levels that barely raised an eyebrow over the past few years are now seen as reasons to dump tech shares.Samsung stock’s decline after the earnings showed “investors might have already priced in solid results and are increasingly focused on the longer-term trajectory of the memory cycle,” said Albert Yong, managing partner at hedge fund Petra Capital Management.Corporate News:Rivian Automotive Inc. is offering to sell 75 million shares as the electric vehicle company seeks to fund equity contributions related to a US Department of Energy loan. Vale SA Chairman Daniel Stieler is stepping down after one of the company’s largest investors agitated to reshape the leadership of the world’s top iron ore producer. Microsoft Corp.’s Xbox plans to eliminate 3,200 jobs, or around 20% of its staff over the next year. Some of the main moves in markets:StocksS&P 500 futures fell 0.3% as of 1:59 p.m. Tokyo time Japan’s Topix fell 0.7% Australia’s S&P/ASX 200 fell 0.4% Hong Kong’s Hang Seng fell 0.4% The Shanghai Composite fell 1% Euro Stoxx 50 futures fell 0.4% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1436 The Japanese yen rose 0.2% to 161.79 per dollar The offshore yuan was little changed at 6.7969 per dollar CryptocurrenciesBitcoin fell 1.2% to $63,053.56 Ether fell 1.5% to $1,765.64 BondsThe yield on 10-year Treasuries advanced one basis point to 4.48% Japan’s 10-year yield was unchanged at 2.825% Australia’s 10-year yield advanced two basis points to 4.80% CommoditiesWest Texas Intermediate crude rose 0.6% to $68.96 a barrel Spot gold fell 0.9% to $4,126.59 an ounce This story was produced with the assistance of Bloomberg Automation.–With assistance from Sangmi Cha and Winnie Hsu.©2026 Bloomberg L.P.
