Asia tech stocks tumble as AI trade doubts deepen before Fed, BOJ decisions

Asian technology stocks experienced a sharp decline on Monday as investors grew increasingly cautious about the sustainability of the AI rally, amid rising bond yields and renewed concerns over the future of AI-linked chipmakers. The KOSPI in South Korea led the drop, falling 3.1%, while Japan's Nikkei 225 slipped 1.1%. U.S. tech sentiment remained weak, with Nasdaq 100 futures falling 1.2%, outpacing the 0.4% decline in S&P 500 futures.

The selloff was triggered by a surge in U.S. Treasury yields, which climbed toward 5%, and markets pricing in an 86% chance of a 25-basis-point Federal Reserve rate hike this week following hotter-than-expected U.S. inflation data. Semiconductor stocks, particularly AI-related chipmakers, faced heightened scrutiny following comments from Anthropic CEO Dario Amodei calling for a slowdown in the development of powerful AI models due to safety concerns.

South Korea's tech sector, heavily reliant on memory-chip giants Samsung Electronics and SK Hynix, was particularly vulnerable to shifts in AI sentiment, with SK Hynix and Samsung Electronics both falling 4.3% and 2.5%, respectively.

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