This content was published on
July 17, 2026 - 03:16
4 minutes
(Bloomberg) — Asian equities fell for a second day as a selloff in chipmakers deepened on mounting concern that massive artificial-intelligence investments may not justify lofty valuations. Oil climbed.The MSCI Asia Pacific Index dropped 1.2% as Japan’s Nikkei 225 Stock Average retreated about 3%. Chipmaker Kioxia Holdings Corp. sank as much as 16%, extending its losses to more than 50% from a record high reached last month. Taiwan Semiconductor Manufacturing Co. dropped more than 3% as a solid earnings outlook was overshadowed by a higher spending forecast.Also weighing on sentiment was Netflix Inc., whose shares fell 9% in extended trading after forecasting a second quarter of slowing sales growth. That sent the futures contracts for the Nasdaq 100 Index down 0.6%.Elsewhere, Brent rebounded from Thursday’s losses as hostilities across the Middle East continued to escalate and shipping traffic slumped in the Strait of Hormuz. The commodity traded just above $85 a barrel and was up 12% for the week, on track for its biggest weekly gain since April and rekindling inflation concerns.Technology stocks have come under pressure in recent weeks as investors increasingly question whether this year’s blistering AI-driven rally has run too far, too fast. While recent softer US inflation numbers have eased expectations of an immediate Federal Reserve interest-rate hike and Middle East tensions continue to drive oil prices, the focus remains on AI earnings for evidence that billions of dollars in spending will translate into returns.“The action in the chip stocks going forward is still the most important issue for the stock market,” said Matt Maley, chief market strategist at Miller Tabak. “They are definitely showing some meaningful cracks, so they’re going to have to see a strong and sustainable rebound soon or it will raise some real warning flags.”In other corners of the market, Government bonds edged lower in Australia and New Zealand, while Treasuries were little changed.The yen steadied around 162.40 per dollar even as Japan’s Finance Minister Satsuki Katayama renewed her warning of possible intervention in the currency market as the currency continued to hover near its lowest level in four decades.In a renewed bout of volatility Thursday, a US gauge of chip giants slumped more than 4% as investors questioned whether tech stocks have grown too richly valued. Alphabet Inc. sank 4.4% as Google was said to be months behind schedule on delivering its most-powerful flagship AI model.What Bloomberg’s Strategists Say…The trend is now an enemy for Asian equities, especially those in South Korea, rather than the friend it was when they soared for much of the first half of 2026.— Garfield Reynolds, MLIV Asia Team Leader. For full analysis, click here.Traders are grappling with whether tech stocks have grown too richly valued amid all the uncertainty over when trillions of dollars in spending will deliver lucrative returns. The four biggest US AI operators are expected to spend more than $725 billion this year alone.The Philadelphia Semiconductor Index has dropped about 19% from a June peak. A gauge of Asian semiconductor makers headed for its biggest weekly decline since early March, with Japanese companies taking a hit on Friday.“With South Korea closed today, investors may be using the Japanese market to hedge semiconductor-related concerns that cannot be absorbed in Korea,” said Yugo Tsuboi, chief strategist at Daiwa Securities.Some of the main moves in markets:StocksS&P 500 futures fell 0.4% as of 10:14 a.m. Tokyo time Hang Seng futures fell 0.4% Japan’s Topix fell 1.5% Australia’s S&P/ASX 200 fell 0.7% Euro Stoxx 50 futures fell 0.5% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1444 The Japanese yen was little changed at 162.45 per dollar The offshore yuan was little changed at 6.7753 per dollar CryptocurrenciesBitcoin fell 0.2% to $63,945.7 Ether fell 0.2% to $1,867.09 BondsThe yield on 10-year Treasuries was little changed at 4.56% Japan’s 10-year yield was unchanged at 2.715% Australia’s 10-year yield advanced three basis points to 4.92% CommoditiesWest Texas Intermediate crude rose 1.4% to $80.02 a barrel Spot gold rose 0.4% to $3,991.17 an ounce This story was produced with the assistance of Bloomberg Automation.–With assistance from Stephen Kirkland and Momoka Yokoyama.©2026 Bloomberg L.P.
