(Bloomberg) — Asian equities fell after a tech selloff hit Wall Street Friday, with chip shares among the biggest losers. Hong Kong was an outlier as Alibaba Group Holding Ltd. surged.
The MSCI Asia Pacific Index slipped 0.1% with chipmakers pushing the Nikkei-225 index down by 1.6%. Samsung Electronics Co. and SK Hynix Inc. tumbled after the US revoked China chip-gear permits. A gauge of technology shares in Hong Kong jumped as much as 2.6% with Alibaba surging 17% and lifting peers in the broader AI space, including Baidu Inc. and Tencent Holdings Ltd.
Silver reached its highest since 2011 while gold gained for a fifth day, trading around $3,475 an ounce. Indonesian stocks tumbled the most in nearly five months amid political instability. Equity-index futures for US reversed earlier gains to decline 0.1% while contracts for Europe edged up 0.1%. The US is closed Monday for Labor Day. On Friday, a federal appeals court ruled President Donald Trump’s sweeping trade tariffs were illegal.
US shares fell Friday after Nvidia Corp.’s slide and a weak outlook from Marvell Technology Inc. snapped a tech-fueled rally that has lifted markets since April. Still, Alibaba’s surge reaffirmed the view that China’s tech sector is starting to close the gap with US peers in core areas such as AI, said Charu Chanana, chief investment strategist at Saxo Markets.
“While global tech remains preoccupied with geopolitics and valuations, parts of China tech are quietly re-accelerating – driven not by hype, but by real revenue growth in AI and cloud,” she said. “A quiet re-rating for Asia tech is underway.”
It’s a crucial time for equities and the next few weeks will give Wall Street a clear reading on whether the stock market rally will continue — or if it’s doomed to get derailed.
Jobs reports, a key inflation reading and the Federal Reserve’s interest rate decision all hit over the next 14 trading sessions, setting the tone for investors as they return from summer vacations.
The events arrive with stock market seemingly at a crossroads as the S&P 500 Index heads into September, historically its worst month of the year.
September’s record remains on traders’ minds “but few managers will liquidate core holdings on seasonality alone,” Chris Weston, head of research at Pepperstone Group, wrote in a note.
“It seems unlikely that, simply because we’ve moved into September, we’ll suddenly see a radical shift in conditions — especially as the macro environment hasn’t meaningfully changed,” he wrote.
What Bloomberg strategists say:
“Burgeoning optimism regarding China tech seems to be drawing a contrast with a US market that’s been the main beneficiary till now of AI. That may start raising questions about whether there really is no alternative to US tech.”
— Garfield Reynolds, MLIV. Click here for full analysis.
Political risks in Southeast Asian markets are also back in focus. Indonesia’s President Prabowo Subianto canceled a trip to China after deadly unrest over living costs and inequality, with protesters targeting the finance minister and several lawmakers. In Thailand, parties are jockeying to form the next government following the disqualification of Prime Minister Paetongtarn Shinawatra.
Meanwhile, Fed Bank of San Francisco President Mary Daly suggested policymakers will be ready to lower interest rates soon, adding that inflation stemming from tariffs will likely prove temporary.
In commodities, oil declined following a monthly drop in August, with traders focused on concerns over a potential glut and geopolitical tensions. With Washington seeking to force India to halt imports of Russian oil by ratcheting up secondary tariffs, traders will track a meeting later Monday between Prime Minister Narendra Modi and Russian President Vladimir Putin, which is taking place as part of a regional summit in China.
Corporate News:
Alibaba Group Holding Ltd.’s stock leapt more than 18% after reporting a surge in revenue from AI, underscoring the steady progress it’s making against rivals in a post-DeepSeek Chinese development frenzy. BYD Co. shares fell after reporting a staggering 30% plunge in quarterly profit last Friday, its first decline in over three years, it’s become clear that not even dominant players are safe in the cutthroat battle for market share. Meituan launched and open-sourced LongCat-Flash-Chat, a mixture-of-experts model optimized for speed and efficiency in complex AI agent tasks, according to a WeChat statement. Shares reversed losses to jump in Hong Kong. The planned IPO of Reliance Industries’ telecom venture has raised concerns about the potential impact on the parent company’s valuation, according to analysts. Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 2:03 p.m. Tokyo time Japan’s Topix fell 0.7% Australia’s S&P/ASX 200 fell 0.5% Hong Kong’s Hang Seng rose 1.8% The Shanghai Composite rose 0.2% Euro Stoxx 50 futures rose 0.1% Currencies
The Bloomberg Dollar Spot Index was little changed The euro rose 0.2% to $1.1709 The Japanese yen was unchanged at 147.05 per dollar The offshore yuan was little changed at 7.1277 per dollar Cryptocurrencies
Bitcoin fell 1.6% to $107,417.89 Ether fell 1.7% to $4,381.35 Bonds
Japan’s 10-year yield advanced two basis points to 1.620% Australia’s 10-year yield advanced four basis points to 4.32% Commodities
West Texas Intermediate crude fell 0.4% to $63.74 a barrel Spot gold rose 0.8% to $3,476.06 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Winnie Hsu and Abhishek Vishnoi.
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