Asian Stocks Under Pressure After US Tech Selloff: Markets Wrap

Asian equities mirrored Wall Street's decline as traders reduced exposure to technology stocks preceding earnings that could challenge confidence in the artificial intelligence sector. Gold surged for an unprecedented fifth straight day. The MSCI Asia Pacific equities index declined 0.4%, with Japan and South Korea's benchmarks trailing suit.

Earlier, semiconductor behemoths' sell-off drove the Nasdaq 100 Index down nearly 1% on Monday. Nvidia Corporation experienced its seventh consecutive day of stock price drop - the longest losing streak since 2022. US stock index futures slipped lower in early Asian trading. Meanwhile, global crude oil benchmark Brent stayed relatively stable at around $92.20 a barrel following U.S. Treasury Secretary Scott Bessent's warning of economic repercussions for any country engaging in business with Iran. The commodity depreciated over 2% on Monday, marking a halt to a six-day uptrend.

Energy prices dipped, boosting Treasuries on Monday, with the 10-year yield easing four basis points to 4.70%. Gold climbed 0.5% to close near $4,680 an ounce, hovering close to May's levels as the U.S. Treasury's intervention in the bond market reignited worries about fiscal policy and its ramifications for the dollar.

Investors are balancing escalating geopolitical risks against a heavy schedule of economic data and corporate earnings releases, with the fate of technology stocks set to be a critical litmus test for overall market sentiment. Nvidia's earnings report on Wednesday will be scrutinized for indications if the recent slump in chipmaker stocks will persist.

"Details about US economic sanctions on Iran, the Treasury's efforts to reduce long-term yields, and economic data may largely dictate the prevailing market sentiment," stated Chris Larkin at E*Trade from Morgan Stanley. "Yet Nvidia and other tech earnings are expected to exert significant pressure on the market's momentum."

Traders are also awaiting hints on the U.S. Federal Reserve's reactions to persistent inflation when Federal Reserve Chair Kevin Warsh addresses the annual Jackson Hole gathering in Wyoming. Elevated interest rates stemming from high inflation and fiscal deficits are prompting traders to monitor Warsh's comments for any clear instructions on the Fed's future actions over the remainder of the year.

Earlier, Treasury Secretary Bessent stated that the Department had not made any bond purchases to fund buybacks of higher-yielding older securities in an effort to manage borrowing costs. Bessent declined to hint at any imminent changes to U.S. debt management during a press conference following the report. In tariff-related developments, the Canadian dollar remained unchanged as Canadian officials prepared to announce a response to U.S. tariffs on Canadian goods on Tuesday.