BEIJING (dpa-AFX) - Asian stocks fell broadly on Thursday, reversing early gains as investors reacted to escalating Middle East tensions, mixed tech earnings and a sell-off in U.S. bond markets amid uncertainty over where U.S. interest rates are headed.
Tech earnings proved to be a mixed bag, with Microsoft posting strong quarterly earnings and Samsung Electronics forecasting strong AI chip demand, while Meta Platforms issued a weaker-than-expected revenue forecast.
Brent crude futures extended gains to surge above $92 a barrel after rallying nearly 8 percent on Wednesday as the United States carried out fresh strikes on Iran, further intensifying a five-month-old war that is spreading beyond its main fronts to embroil more countries across the region.
The latest escalation came after a drone struck a U.S.-owned gas storage tanker at Egypt's Mediterranean port of Damietta and Iran fired missiles targeting U.S troops in Jordan.
Gold fell to around $4,050 an ounce while the dollar was little changed as focus shifted to the U.S. PCE price data due later in the day that might provide further insights into the inflation outlook and the likely path of interest rates.
China's Shanghai Composite index dropped 0.62 percent to 3,804.69 as regulators intensified their crackdown on corporate insiders to help restore investor confidence in the country's embattled stock markets.
High-flying semiconductor names led losses on valuation concerns and fears that they may be overinvesting in AI infrastructure and capacity. Hong Kong's Hang Seng index finished 0.20 percent higher at 25,858.88 after a choppy session.
Japanese markets rose notably after Advantest issued a stronger-than-expected profit outlook.
While shares of the chip-testing equipment maker surged nearly 11 percent, the Nikkei average rose 0.71 percent to 61,867.43, snapping a two-day losing streak. The broader Topix index ended 0.54 percent lower at 3,952.50.
Seoul stocks fell sharply as investors continued to offload tech stocks on rising concerns over artificial intelligence spending and uncertainty over the Fed's future policy path.
The Kospi index tumbled 1.23 percent to 5,593.56 after volatile trading as the government pledged additional measures to stabilize the stock market and curb retail access to leverage exchange-traded funds.
Among the prominent decliners, memory chipmaker SK Hynix slumped 5.6 percent and internet giant Naver shed 3.4 percent.
Australian markets retreated from a near five-month high as surging U.S. bond yields on inflation fears sapped investors' appetite for risk.
The benchmark S&P/ASX 200 dipped 0.78 percent to 8,967.70, with mining and consumer discretionary stocks pacing the decliners. The broader All Ordinaries index settled 0.84 percent lower at 9,122.70.
Across the Tasman, New Zealand's benchmark S&P/NZX-50 index fell 1.53 percent to 13,762.78 despite a measure of consumer confidence surging to a five-month high in July.
U.S. stocks tumbled overnight as long-term Treasury yields surged on concerns that the Fed may be falling behind in its fight against inflation.
The bond market sold off, with the 30-year Treasury yield reaching its highest level since 2007, as the Fed held its federal funds target range steady at 3.5-3.75 percent despite three officials voting for an increase in rates. The rare 9-3 split vote highlighted internal divisions over the path forward for policy.
Fed Chair Kevin Warsh pledged an unwavering commitment to bring inflation down but said little about the mix of risks and nothing about the outlook for the policy rate.
Inflation worries were compounded by a sharp increase in crude oil prices after President Trump vowed to hit Iran 'hard' in response to attacks on American forces in the Middle East.
U.S. and Saudi fighter aircraft struck multiple terrorist logistics and weapons sites across eastern Iraq in a strong response to over 30 IRGC-directed aerial drone attacks in the last 72 hours, Centcom said.
The Dow slumped 2.2 percent in its worst session since April 2025 while the S&P 500 shed 1.5 percent to reach its lowest level in more than a month.
The tech-heavy Nasdaq Composite gave up 1.7 percent to hit a three-month closing low as semiconductor shares extended recent losses on valuation concerns, doubts about returns from massive artificial intelligence investments and signs of increasing competition from China.
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