Asian stock markets moved lower on Thursday as an extended slide in technology shares combined with renewed U.S.-Iran military strikes to sap investor confidence.
Markets across the region followed a weak lead from Wall Street, where heavy selling in tech names had inflicted fresh losses. In Asian trading, S&P 500 futures steadied and recovered some early ground, but sentiment remained fragile amid worries about persistent inflation and geopolitical escalation.
Tech sector pressure and chip volatility
Technology-focused bourses were among the hardest hit. South Korea's KOSPI, Japan's Nikkei 225 and Hong Kong's Hang Seng each fell by more than 1% during the session. The KOSPI plunged as much as 4% at one point before paring losses when heavyweight chipmaker SK Hynix Inc (KS:000660) staged a partial recovery after reports it planned to triple its wafer capacity.
Chipmaking stocks have been the main drag on the technology complex this week, as investors took profits following a rapid, AI-driven surge in the sector during May. Traders and analysts noted that the AI-fueled rally appeared to be cooling in June amid ongoing doubts about the industry's long-term revenue prospects.
A report published Wednesday evening indicated that AI leader OpenAI is weighing deep price cuts in response to intensifying competition from rival Anthropic. Those potential reductions in price would further pressure revenue at a company already operating with substantial losses.
Geopolitical tensions add to risk-off mood
Beyond technology, broader Asian markets retreated after the United States and Iran exchanged strikes on Wednesday. The U.S. said it had hit several military targets in Iran, prompting retaliatory strikes by Tehran against American bases and allied forces in the Middle East. The fresh hostilities undercut recent statements by U.S. officials that a peace deal with Iran was near, and President Donald Trump warned of further potential attacks.
Oil prices jumped following the renewed clashes, stoking concerns that energy-driven inflation could rise and squeeze markets further. Those inflation fears were compounded by a strong U.S. consumer inflation print for May, keeping the outlook for interest rates and price pressures squarely in focus. Producer inflation data due later on Thursday was expected to provide additional guidance to markets.
Regional index moves
Across Asia, Australia’s ASX 200 declined 0.5%. In China, the Shanghai Shenzhen CSI 300 dropped 1.1% while the Shanghai Composite fell 0.8%. Singapore’s Straits Times slid 0.4%, and futures for India’s Nifty 50 were down 0.3%.
Overall, the session reflected the intersection of a cooling technology rally and a sudden spike in geopolitical risk, each reinforcing investor caution as markets awaited more economic and inflation signals.