Asian stocks drop after AI jitters hit US equities
A selloff was triggered after a cheap AI model from Chinese startup DeepSeek climbed to the top of Apple’s appstore, sparking concerns that valuations of the technology may be tough to justify. Japanese stocks fell, with chip-related shares extending Monday’s declines. That was after the S&P 500 dropped 1.5% and the Nasdaq 100 sank 3%. Nvidia Corp., the poster child of the AI boom, suffered the biggest market-cap loss for a single stock in market history.
The dollar gained against all of its Group-of-10 peers after US President Donald Trump said he’ll soon put tariffs on foreign-produced semiconductors, pharmaceuticals and some metals in order to compel producers to manufacture in the country. Scott Bessent, whom the Financial Times said backed gradual universal levies, was confirmed as the next Treasury Secretary.
US equity futures were little changed early Tuesday. Many Asian markets are shut for Lunar New Year holidays, with China, Indonesia, South Korea, Taiwan and Vietnam among those closed. Bourses in Hong Kong and Singapore are set to close early.
“What was shaping up to be a big week in the markets got even bigger with the disruption in the AI space,” said Chris Larkin at E*Trade from Morgan Stanley. “That could make this week’s megacap tech earnings even more critical to market sentiment.”
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