Asian Stocks Fall, Bucking U.S. Tech Rebound — Update

By Sherry Qin and Kimberley Kao

Asian stocks continued to fall Tuesday, shrugging off Wall Street's rally overnight amid ongoing artificial-intelligence investment concerns and elevated oil prices.

U.S. semiconductor and AI-related stocks rebounded Monday, lifting the S&P 500 and Nasdaq higher after last week's sharp pullback.

However, AI infrastructure stocks in Asia didn't follow suit. South Korea's SK Hynix and Samsung Electronics fell 5.3% and 3.8%, respectively, on Tuesday. Japan's Kioxia Holdings slid 3.2% and Taiwan Semiconductor Manufacturing Co. ended 0.6% lower.

The index heavyweights dragged regional benchmarks lower. South Korea's Kospi was down 4.3%, Japan's Nikkei Stock Average slipped 1.4% and China's Shanghai Composite Index was off 0.6%. Hong Kong's Hang Seng Index was 1.2% lower after reopening following a holiday on Monday, while Taiwan's Taiex ended down 1.1%.

Investors are becoming more selective instead of treating the entire ecosystem as one trade, said Chris Weston, head of research at Pepperstone, in a note. "The market doesn't need every AI infrastructure company to succeed for the investment theme to work," he added.

Financing the build-out of AI infrastructure to meet demand is increasingly straining markets, as it coincides with large government budget deficits, and crucially, monetary policy tightening, Eastspring Investments said in a note.

"The clear risk is that analysts are underestimating the impact of higher financing costs on AI capex spending," it said, adding that the third-quarter earnings results from U.S. hyperscalers and Asia's key semiconductor firms will signal whether this risk unfolds or if the worry is unfounded.

Meanwhile, oil prices gained on continued concerns over supply disruption risks.

While Persian Gulf oil flows improved in the second week of October, the recovery may be under threat amid increased attacks, ANZ Research analysts said in a note. "There is no easy fix to the energy crisis other than an end to hostilities," said Ipek Ozkardeskaya, senior analyst at Swissquote.

Front-month WTI crude oil futures were up 0.4% at $104.11 a barrel, while Brent crude oil futures were 0.5% higher at $110.20 a barrel.

Write to Sherry Qin at sherry.qin@wsj.com and Kimberley Kao at kimberley.kao@wsj.com

(END) Dow Jones Newswires

October 20, 2026 02:34 ET (06:34 GMT)