Asian stocks mostly fall as Big Tech stocks slide hurts Wall Street rally WFTV

TOKYO — (AP) Asian stocks were mostly lower Thursday, with Tokyo's benchmark index falling more than 2%, after Wall Street's record rally hit a wall of concerns about a potential escalation of trade tensions with China.

In early afternoon trading, Japan's Nikkei 225 index was down 1.9% at 40,324.17.

Markets focused on chip companies after a Bloomberg News report said President Joe Biden was considering the harshest possible trade restrictions if companies like the Netherlands ASML and Japan's Tokyo Electron continue to ship advanced semiconductor technologies to China.

The US government has Chinese access blocked advanced chips and the equipment to make them, citing security concerns, and urged its allies to follow suit.

Technology stocks weighed on Tokyo trading. Shares of Tokyo Electron fell 9.4% and chipmaker Advantest fell 4.6%. Lasertec Corp. fell 6.2%.

The strengthening yen also raised concerns about Japanese exporter stocks, as a weak yen is a boon for the country's giant exporters like Toyota Motor Corp.

The U.S. dollar rose to 156.49 yen from 156.19. It had been trading above 161 yen for most of last week but has fallen in recent sessions. The euro was at $1.0936, down from $1.0941.

According to Tan Jing Yi of Mizuho Bank, the recent currency fluctuations are the result of US policy taking center stage. Former President Donald Trump worries that a strong dollar could be a disadvantage for the US, as it makes US-made goods relatively more expensive in foreign markets.

Elsewhere in Asia, Hong Kong was a regional outlier, gaining 0.3 percent to 17,776.73 points. The Shanghai Composite Index edged down 0.1 percent to 2,959.25 points.

Investors await news of policies to revive China's slowing economy as a high-level meeting of the ruling Communist Party ends in Beijing on Thursday.

Australia's S&P/ASX 200 index fell 0.2% to 8,041.80 points. South Korea's Kospi fell 1.4% to 2,803.95 points.

Taiwan's Taiex fell 2.1% while chip giant TSMC fell 3.2% after losing 8% overnight in U.S. trading.

In addition to concerns about new controls on chip and equipment sales to China, Taiwan shares fell after former President Donald Trump criticized the Beijing-claimed self-ruled island, which the United States is obligated by treaty to defend if attacked.

Taiwan should pay us for our defense, Trump said, according to a transcript of an interview published by Bloomberg. Taiwan took our chip business, I mean, how stupid are we? he said.

Wednesday on Wall Street, losses for Nvidia and other Big Tech heavyweight sent the Nasdaq Composite down 2.8%, its worst drop since 2022. It closed at 17,996.92 points.

The S&P 500 fell 1.4% to 5,588.27.

Advanced Micro Devices fell 10.2% and Broadcom fell 7.9%.

The Dow Jones Industrial Average rose 0.6% to 41,198.08.

It's a continuation of a recent trend that market watchers have called encouraging, one in which more stocks are rising rather than a handful of elites dominating. The smaller stocks in the Russell 2000 were coming off a five-day streak of big gains on hopes that Interest rates are about to get easier and the American Economy will avoid a recession, even though the index fell 1.1% on Wednesday, giving back some of the gains.

ASML saw its U.S.-listed shares fall 12.7%, even as it reported spring sales at the top of its forecast range.

The moves in the stocks of big tech companies have an outsized effect on indexes like the S&P 500, which give more weight to larger companies. That’s been a boon in recent years, when a small group of companies known as the “Magnificent Seven” soared almost independently of developments in the broader economy and interest rates. That helped mask underlying weaknesses as the economy struggled with high interest rates that were supposed to stifle inflation.

On Thursday morning, a barrel of American crude oil gained 61 cents to $83.46. A barrel of Brent, the international benchmark, gained 42 cents to $85.50.

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AP Business reporter Stan Choe contributed to this report.

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