Asian stocks stuttered Wednesday as investors fought to claw back the previous day’s steep tech losses, with focus turning to US inflation data and upcoming earnings from key AI-linked firms.
Tech firms took a hammering on Tuesday amid concerns about China’s progress in developing AI chips and following comments by Broadcom’s boss likening the AI buying frenzy to gambling.
The ructions felt in Seoul, Tokyo and Taipei — which have big tech weightings — saw giants SK hynix, Advantest and TSMC suffer huge losses, pushing them back towards levels last seen following their summer rout.
All three markets bounced Wednesday as the same firms provided much-needed support, with Seoul and Taipei both up more than one percent.
There were also advances in Shanghai and Singapore, but Hong Kong, Sydney, Wellington and Manila dropped.
The gains were helped by hopes that the US Federal Reserve could avoid hiking rates further next year, after the bank’s New York boss suggested the policy board could hold off after lifting once more this year.
“I haven’t changed my view that it may be appropriate to have one more rate hike,” John Williams told Bloomberg News in an interview.
“I don’t think at this time I have any reason to believe that we would need to do more” after that.
He said there were signs inflation will come down towards the Fed’s two percent goal next year as the impacts from tariffs and an energy price shock fade.
All eyes are on the release of consumer price data due later Wednesday, which could play a key role in whether the bank decides to hike for a second successive meeting on October 28.
“After another disappointing (non-farm payrolls) report, the third in the last four months, the Fed is stuck between a rock and a hard place,” said Matt Weller at FOREX.com.
“The labour market is showing signs of deteriorating, while price pressures have remained above the central bank’s target for more than five years.
“Markets are currently pricing in about a one-in-four chance that the central bank will raise interest rates at its meeting… setting a relatively high bar to tip the FOMC (Federal Open Market Committee) toward another rate hike.”
Also in view this week are earnings from Dutch giant ASML and Taiwan’s TSMC.
ASML is a critical cog in the global economy and a key bellwether for the semiconductor sector, while TSMC makes advanced processors for companies including Nvidia and Apple.
“After a strong first half (of 2026), semiconductor stocks have come under pressure as higher bond yields, geopolitical uncertainty and concerns about the scale of AI capital expenditure have prompted investors to reassess valuations,” said Saxo Markets’ Charu Chanana.
