Asian Markets Plunge Amid US Chip Selloff and Geopolitical Tensions

Asian stock markets experienced sharp declines on Tuesday, led by South Korea's Kospi index, which dropped between 6% and 6.9%. The downturn followed a selloff of United States chipmakers, where the Nasdaq 100 fell 0.7% and a chipmaker gauge dropped 2.7%. Investors expressed concerns over the durability of the AI rally and reports that ChangXin Memory Technologies is closing the technology gap between Chinese and U.S. firms.

Market volatility intensified as geopolitical tensions escalated. Russian forces launched strikes on Ukrainian energy infrastructure despite a previously announced energy ceasefire, while Iran-backed Houthi militants attacked an international airport in Riyadh, Saudi Arabia, killing at least 13 people. These events pushed Brent crude futures toward a two-week high of $105.9 per barrel, fueling global inflation fears.

In Japan, the Nikkei index slid between 2.5% and 2.6%. While most Asian equity-index futures pointed lower, Australian futures edged higher. Investors are now shifting their focus toward upcoming U.S. inflation data and third-quarter earnings reports to gauge economic resilience and determine the future monetary policy of the Federal Reserve System.