Asian stocks slipped on Wednesday, reversing early gains, as investors turned cautious ahead of Nvidia’s highly anticipated earnings report. The weakness in global tech shares continued to weigh on sentiment.
S&P 500 futures fell 0.1% in Asian trading, reflecting the cautious tone after Wall Street’s sharp declines overnight.
The tech sector led regional losses, with South Korea’s KOSPI down 0.7% and Hong Kong’s Hang Seng Index also lower. Xiaomi plunged 4.7% after warning that surging chip costs could squeeze smartphone margins—overshadowing stronger-than-expected quarterly profits and its EV unit’s first-ever profit. Baidu also fell on signs of weaker ad revenue.
Investors remain focused on Nvidia’s results later today, as questions mount over whether the company can justify its $5 trillion valuation, even if it delivers another record-breaking quarter. AI-related regional stocks including SK Hynix, Samsung Electronics, and Advantest dropped more than 1%.
Japan’s Nikkei 225 fell 0.2% to a one-month low, while the TOPIX was flat. Fiscal concerns, surging bond yields, and renewed diplomatic tensions with China pressured sentiment. Following remarks by Prime Minister Sanae Takaichi regarding Taiwan, Beijing issued a travel advisory and blocked the release of several Japanese films.
Mainland Chinese equities outperformed slightly, with the CSI 300 up 0.2% amid selective bargain hunting. Australia’s ASX 200 and Singapore’s Straits Times Index both edged lower, while India’s Nifty 50 gained modestly but remained fragile after recent losses.
Traders continued to scale back bets on a December Fed rate cut, with CME FedWatch now pricing in just a 41% chance of a 25-basis-point reduction. Markets are awaiting further U.S. data for clearer signals on monetary policy direction.