Asian Shares Slide On Inflation, AI Spending Worries

Asian equities fell on Friday, pressured by rising oil prices and heightened Middle East tensions that raised fears of inflation driven by energy costs.

The Trump administration added further uncertainty to a fragile global economy by announcing higher tariffs on imports from 60 trading partners, citing forced‑labor concerns.

Tariff rates will range from 10% to 12.5% and affect major economies including the European Union, the United Kingdom, China, India, Japan, and Canada, replacing a temporary 10% global levy that expires today.

Intel’s stronger‑than‑expected Q2 revenue and optimistic third‑quarter guidance provided only short‑lived support amid broader concerns about economic outlook, consumer spending, and corporate earnings.

The U.S. dollar stayed weak even as bond yields rose, while gold hovered near $4,046 per ounce, little changed after a roughly 2% decline in the prior session.

Brent crude futures slipped about 2% to just under $99 a barrel but remain on pace for a 12% weekly increase as worries over global supply disruptions intensify.

Following the United States’ 13th consecutive night of strikes on Iranian targets, Tehran responded with missile attacks aimed at neighboring Arab nations that host U.S. military bases.

Iran said it struck U.S. missile systems, weapons depots, and fuel storage facilities in Jordan, as well as American military positions in Kuwait.

China’s Shanghai Composite Index fell 1.61% to 3,814.20, weighed down by inflation worries and liquidity concerns.

Concerns that the forthcoming listing of memory‑chip maker CXMT may divert funds from the equity market have emerged; Hong Kong’s Hang Seng Index slipped 0.98% to 24,963.23.

Japanese markets slumped as rising oil prices revived inflation fears; data earlier showed Japan’s core inflation rate rose to 1.6% in June, remaining below the BOJ’s 2% target.

The U.S. Treasury Department cautioned against excessive yen volatility, keeping the Bank of Japan on track for another interest‑rate hike later this year.

The Nikkei Average dropped 2.73% to 64,611.15 as technology stocks fell sharply over doubts about the sustainability of heavy AI infrastructure spending; the broader Topix index declined 1.05% to 4,011.31.

Among notable decliners, Tokyo Electron, Advantest, SoftBank Group, and Kioxia Holdings fell 5% to 9%.

Seoul stocks plunged after U.S. President Trump threatened a ‘massive attack’ on Iran that could be ‘bigger than ever,’ while concerns that the semiconductor super‑cycle may have peaked dampened investor sentiment.

The Kospi index fell 5.72% to 6,690.62, with Hyundai Motor, Samsung Electronics, and SK Hynix each dropping 7% to 8%.

Australian markets closed lower amid rising inflation concerns and ahead of a pivotal earnings season beginning next week.

The S&P/ASX 200 fell 0.75% to 8,772.30, while the broader All Ordinaries index slipped 0.85% to 8,941.50.

Across the Tasman, New Zealand’s S&P/NZX-50 index slipped 0.17% to 13,772.29.

Overnight, U.S. stocks fell sharply as AI‑related concerns and rising oil prices amid escalating U.S.–Iran tensions sapped risk appetite.

Both Tesla and Alphabet announced aggressive AI capital‑expenditure plans, reigniting worries about heavy AI spending and stretched valuations.

Brent crude oil surged above $100 per barrel for the first time since May, while the 10‑year Treasury yield rose to its highest level since January 2025 as clashes intensified over key shipping routes after Houthi attacks on Saudi tankers.

U.S. President Donald Trump warned both Iran and Yemen’s Houthi rebels of ‘major military punishment’ after the Houthis launched missile and drone strikes on oil tankers in the Red Sea to enforce a blockade on Saudi Arabia.

The tech‑heavy Nasdaq Composite slipped 2.2%, the S&P 500 fell 1.2%, and the Dow retreated 1%.

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