Asian shares fall as tech stocks slide on Wall Street; investors eye Fed chair’s upcoming speech

Asian stock markets retreated on Wednesday, following a decline on Wall Street led by technology giants like Nvidia, which have benefited from the recent surge in artificial intelligence enthusiasm.

Japan’s Nikkei 225 dropped 1.7% to 42,787.28 amid weakness in chip-related stocks. Exports from Japan fell slightly more than expected in July, pressured by higher U.S. tariffs. Key semiconductor equipment makers saw steep losses, with Advantest plunging 6.6%, Disco Corp. down 4.7%, Tokyo Electron losing 1.9%, and Lasertec Corp. dropping 1.8%.

Taiwan’s Taiex index declined 2.4%, dragged down by a 3.8% fall in chipmaker TSMC. Hong Kong’s Hang Seng slipped 0.6% to 24,980.20, while China’s Shanghai Composite edged down 0.1% to 3,725.22 after the People’s Bank of China kept benchmark interest rates unchanged, as expected.

Australia’s S&P/ASX 200 bucked the regional trend, gaining 0.2% to 8,917.60. South Korea’s Kospi fell 1.4% to 3,096.09 amid heightened geopolitical tensions after North Korean leader Kim Jong Un condemned recent South Korea-U.S. military drills and vowed to rapidly expand his nuclear forces.

On Wall Street, the S&P 500 slipped 0.6% to 6,411.37 for its third consecutive loss but remains near record highs. The Dow Jones Industrial Average edged up less than 0.1% to 44,922.27, while the tech-heavy Nasdaq Composite dropped 1.5% to 21,314.95.

Nvidia, a key driver of the AI rally, slid 3.5%. Palantir Technologies, another AI favorite, plunged 9.4%, marking the largest loss in the S&P 500 amid growing bets that its stock price will decline. Meta Platforms fell 2.1%, also seeing increased short interest this year.

Investors have grown wary of soaring valuations in AI-related stocks and concerns over potential trade restrictions in the chip sector, prompting profit-taking.

Home Depot’s shares rose 3.2%, helping the Dow outperform other indexes. Despite slightly missing analysts’ quarterly expectations, the retailer reported revenue growth and maintained full-year revenue and profit forecasts.

Wall Street’s focus shifts to Friday’s much-anticipated speech by Federal Reserve Chair Jerome Powell at Jackson Hole, Wyoming. Markets hope Powell will signal possible interest rate cuts soon. The Fed has held rates steady this year, wary of inflationary risks from tariffs, but weak recent job growth has shifted expectations toward rate cuts at the September meeting.

Bank of America strategists caution Powell may not commit to cuts and could discuss risks of “stagflation,” where economic stagnation coincides with high inflation — a scenario difficult to manage with current Fed tools.

In commodities, U.S. crude oil rose 12 cents to $61.89 per barrel, and Brent crude gained 11 cents to $65.90. The U.S. dollar softened slightly against the Japanese yen to 147.52 yen, while the euro dipped to $1.1636.