Asian Stocks Tumble as Tech Selloff Deepens Ahead of Fed Decision, Big Tech Earnings

Asian stock markets posted steep losses on Wednesday as a sharp technology sector selloff continued for a second day, with South Korea leading regional declines ahead of the U.S. Federal Reserve’s policy announcement and earnings reports from major U.S. technology companies.

Investor sentiment also weakened after Iran launched fresh missile attacks targeting U.S. forces, driving oil prices higher and renewing concerns about inflation and the outlook for global interest rates. The escalating geopolitical tensions added pressure to already fragile markets after a mixed Wall Street session, where gains in the Dow Jones contrasted with losses in the Nasdaq. Nasdaq 100 futures fell 0.4%, while S&P 500 futures slipped 0.1%.

South Korea’s KOSPI plunged more than 8%, extending Tuesday’s heavy losses and leaving the benchmark down roughly 34% from its recent peak. Analysts said the sharp correction could tighten domestic financial conditions enough to influence future monetary policy. Chipmaker SK Hynix dropped over 10% despite reporting record quarterly profits fueled by strong demand for AI memory chips. Samsung Electronics declined more than 5%, while LG Innotek fell nearly 11%.

Japan’s Nikkei 225 also lost around 2% as semiconductor and electronics stocks remained under pressure. Kioxia Holdings fell almost 8%, Murata Manufacturing slid more than 13%, and TDK continued its decline. Sony Group outperformed the sector, rising more than 3%. Investors also remained concerned that China’s expanding semiconductor industry could increase competition for Japanese and South Korean chipmakers.

Chinese markets recorded more moderate losses, with Hong Kong’s Hang Seng falling about 1.5% and both the Shanghai Composite and CSI 300 losing over 0.5%. Taiwan’s benchmark index dropped nearly 4% as Taiwan Semiconductor Manufacturing (TSMC) and Foxconn both fell more than 2%. TSMC also confirmed that operations at its Kumamoto plant in Japan had resumed following a powerful earthquake.

Australia stood out as the region’s strongest performer. The S&P/ASX 200 climbed to its highest level since early April after weaker-than-expected inflation data reduced expectations of another Reserve Bank of Australia rate hike. Rio Tinto gained nearly 5% after reporting stronger-than-expected earnings.

Markets are now focused on the Federal Reserve’s policy decision, where rates are widely expected to remain unchanged. Investors will also closely watch comments from Fed officials and quarterly earnings from Microsoft and Meta Platforms for further direction on interest rates, artificial intelligence spending, and broader market sentiment.