Asian Shares Mixed On AI Spending Worries

(RTTNews) - Asian stocks ended mixed on Tuesday, with tech-heavy Japan and South Korea leading losses amid doubts over returns from billions of dollars of artificial-intelligence spending.

Investors also waited cues from big tech earnings and a Federal Reserve decision on Wednesday.

The U.S. dollar hovered near a one-month high in Asian trade while gold traded below $4,050 an ounce as investors assessed Fed rate hike risks.

Fed Chair Warsh "wants to do the right thing," but is facing a Fed board that might oppose him, U.S. President Donald Trump told reporters en route to an event in Michigan on Monday while repeating his long-stated wish for cuts in interest rates.

Brent crude futures fell toward $86 a barrel, marking a third consecutive session of losses after Trump said the U.S. was having "good talks" with Iran, raising optimism over the prospects for a negotiated peace deal.

It was said that the talks are being conducted mainly between Iran and Oman, but Qatar, Pakistan, Egypt and Trump's envoys, Steve Witkoff and Jared Kushner, are also actively involved.

China's Shanghai Composite index fell 1.16 percent to 3,813.31, reaching a one-week low amid concerns over rising domestic chip production and massive investments in artificial intelligence infrastructure. Media reports suggested that a Chinese state-backed firm had started producing one of the key pieces of equipment used in chip manufacturing for the first time. Hong Kong's Hang Seng index ended a choppy session 0.41 percent higher at 25,310.85.

Japanese markets tumbled to reach their lowest level in over two months, led by a deep sell-off in semiconductor and AI-related stocks. The Nikkei average slumped 3.95 percent to 62,364.92 while the broader Topix index closed 2.52 percent lower at 3,963.59.

Among the prominent decliners, memory chip maker Kioxia Holdings nosedived 18.3 percent while semiconductor equipment makers Advantest and Tokyo Electron lost 10-11 percent.

Banks Mitsubishi UFJ Financial and Sumitomo Mitsui Financial both fell around 4 percent ahead of the Bank of Japan's interest-rate decision scheduled for Friday.

Seoul stocks nosedived on concerns about companies' heavy spending on artificial intelligence and fears over China accelerating semiconductor self-sufficiency.

The Kospi index plummeted 10.84 percent to 6,023.66, with tech heavyweights leading losses on growing doubts over the future of large-scale investment into AI infrastructure.

Market bellwether Samsung Electronics plunged 13.4 percent and peer SK Hynix lost 14.7 percent ahead of earnings from Microsoft, Metal, Apple and Amazon due this week. Australian markets advanced as investors pared back rate-hike odds.

The benchmark S&P/ASX 200 rose 0.60 percent to 8,947.80, reversing an early loss after RBA Governor Michele Bullock said housing and jobs market conditions had eased more steeply than predicted following recent cash rate increases, prompting traders to push out expectations for another interest rate hike to March 2027.

The broader All Ordinaries index closed 0.53 percent higher at 9,112, led by consumer discretionary, telecoms and healthcare stocks.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 index finished marginally higher at 13,861.93, marking its second consecutive record close.

Overnight, U.S. stocks fluctuated before ending narrowly mixed. Investors sold off chip stocks as concerns over China's rising semiconductor capabilities coupled with Nvidia's AI infrastructure deals worth more than $750 billion sparked fears of an AI bubble and circular financing.

In economic news, data showed June durable goods orders rose 0.3 percent in June after tumbling by a revised 4.0 percent in May, missing forecasts and signaling weaker demand.

While the tech-heavy Nasdaq Composite slid 0.2 percent to hit a nearly three-month closing low, the S&P 500 inched up marginally and the narrower Dow added half a percent.