Markets in Asia slowed down on Friday as traders paused after a strong week, especially in the tech sector. Investors had been buying heavily into companies linked to artificial intelligence, but some are now starting to question how sustainable that rally is.
Tech rally faces fresh doubts
For the past two years, major U.S. tech companies — often called the “Magnificent Seven” — have led the market higher thanks to excitement around AI. But that momentum has been weaker so far this year as investors worry that valuations may be getting too high and profits may not grow fast enough.
Even strong results from Nvidia failed to keep the rally going. The company recently reported that its quarterly profits more than doubled and forecast more growth ahead. Still, tech stocks on Nasdaq Composite fell more than one percent.
Analysts say expectations have simply become too high.
According to market analyst Julian Pineda, investors had already priced in much of the good news.
He also pointed out that Nvidia’s growth depends heavily on big tech companies continuing to spend heavily on AI infrastructure. If those companies slow their spending to control costs, it could affect Nvidia’s future growth.
Focus shifting to chipmakers
Another trend emerging in the market is a shift from companies that build apps and software to those that supply the hardware behind AI — especially chipmakers.
Many of these companies are based in Asia, which has helped lift several regional tech stocks recently.
Mixed performance across Asia
Asian markets showed mixed results on Friday.
The decision by the Supreme Court of the United States last week to block many tariffs introduced by Donald Trump has been seen as positive for Asian economies that rely on exports.
Markets in Hong Kong, Singapore, and Wellington edged higher, while Sydney and Shanghai moved between small gains and losses.
However, Seoul fell more than one percent after a strong week. The South Korean market had jumped about 8.5 percent earlier in the week, largely driven by gains in chip giants Samsung Electronics and SK hynix.
Markets in Tokyo, Manila, and Jakarta also ended lower.
Yen and interest rate signals
The Japanese yen recovered slightly against the dollar after comments from a board member of the Bank of Japan supporting further interest rate hikes.
At the same time, new data showed inflation in Tokyo slowed last month, which could support arguments for the central bank to move more cautiously.
Political pressure has also weighed on the currency. Japan’s prime minister Sanae Takaichi recently nominated two academics to the Bank of Japan board who are considered more supportive of easy monetary policy. She has also reportedly expressed concerns about tightening policy too quickly to BOJ governor Kazuo Ueda.
Oil slips on Iran–U.S. talks
Oil prices edged lower after news that the United States and Iran made “significant progress” in nuclear negotiations.
The talks, mediated by Oman, aim to reduce tensions and avoid a potential conflict in the oil-rich Middle East. The two sides agreed to hold another round of discussions next week in Vienna.
Lower geopolitical risks in the region often put downward pressure on oil prices.
Key market numbers
- Tokyo – Nikkei 225: down 0.4% at 58,528
- Hong Kong – Hang Seng Index: up 0.2% at 26,427
- Shanghai Composite: flat at 4,146
Currency markets:
- Dollar/Yen: 155.85 yen
- Euro/Dollar: $1.1796
- Pound/Dollar: $1.3484
Oil prices:
- West Texas Intermediate: $65.02 per barrel
- Brent Crude: $70.54 per barrel
Earlier in the West:
- Dow Jones: up slightly at 49,499
- FTSE 100: up 0.4% at 10,846.
