Tech stocks fluctuate as doubts emerge over the AI-driven rally, while investors look ahead to key earnings reports.
Asian markets were mixed on Monday as investors struggled to extend last week’s late tech recovery, with attention shifting to the upcoming earnings season, while oil prices eased as supplies continued to flow through the Strait of Hormuz.
After a weak end to June driven by concerns that AI-linked valuations had run too far, sentiment improved on Thursday following data showing fewer US jobs were created last month than expected.
The softer labour data helped ease fears that the Federal Reserve could move quickly to raise interest rates to tackle inflation, sparking a broad rebound across Asia, led by Seoul.
However, traders remained cautious, with tech stocks again experiencing sharp swings in early Monday trade. Seoul, in particular, reversed from gains of nearly 2% to losses of more than 2%.
Tokyo also traded in the red alongside Singapore and Sydney, while Hong Kong, Shanghai, Wellington, and Taipei edged slightly higher.
The AI theme continues to dominate markets, with attention now focused on when companies will begin seeing returns on the trillions of dollars invested in the sector and whether valuations have become overstretched.
Alphabet, Amazon, Meta, and Microsoft have collectively signalled plans to allocate more than $725 billion to AI-related investment this year alone.
Sentiment received a boost from Taipei-listed Hon Hai, which reported a stronger-than-expected jump in April–June sales and forecast further growth ahead.
The company, also known as Foxconn, has expanded beyond assembling lower-margin iPhones into producing AI servers for Nvidia, as well as electric vehicles and robotics. Its shares surged more than 6% in Taipei.
The report comes at the start of an earnings season that investors will closely watch for insights into companies’ AI strategies and their outlook amid the massive capital being deployed so far.
Also in focus is the Wall Street debut of South Korean chip giant SK hynix, with its $29 billion listing set for Friday.
Crude oil prices extended losses as tanker traffic continued through the Strait of Hormuz, supported by optimism around US–Iran peace talks.
However, SPI Asset Management’s Stephen Innes cautioned that any positive effects may take time to filter through to the broader economy.
“Energy knock-on effects rarely arrive all at once,” he wrote. “First crude moves, then freight, transport, consumer confidence, corporate margins, inflation expectations, and eventually the questions central bankers would rather avoid.”
“A few more tankers moving safely through the Strait of Hormuz may take the edge off the immediate panic premium, but it does not undo the cost pressures already working their way through the global economy.”
Dr Karsten Junius, chief economist at Bank J. Safra Sarasin, added: “Oil exports remain well below pre-war levels and bottlenecks are likely to persist.”
“Meanwhile, efforts to rebuild strategic and commercial reserves should support demand. As a result, oil prices are likely to settle around $75–$80 a barrel over the coming year, keeping the inflation trajectory more elevated this year.”
Key figures around 0230 GMT
Tokyo — Nikkei 225: DOWN 1.2 percent at 68,919.14 (break)
Seoul — KOSPI: DOWN 2.4 percent at 7,894.58
Hong Kong — Hang Seng Index: UP 0.4 percent at 23,440.64
Shanghai — Composite: UP 0.3 percent at 4,055.47
Dollar/yen: UP at 161.79 yen from 161.29 yen on Friday
Euro/dollar: DOWN at $1.1430 from $1.1442
Pound/dollar: DOWN at $1.3341 from $1.3355
Euro/pound: DOWN at 85.65 pence from 85.68 pence
West Texas Intermediate: DOWN 0.1 percent at $68.64 a barrel
Brent North Sea Crude: DOWN 0.3 percent at $71.93 a barrel
London — FTSE 100: UP 0.3 percent at 10,679.03 (close)
New York — Dow: closed for public holiday
