Asian stock markets mixed as AI excitement lifts Wall Street

Markets across Asia showed a split picture on Tuesday, with some exchanges posting losses while others managed small gains following a positive session on Wall Street driven by strong performance from technology companies focused on artificial intelligence.

The main Japanese stock index fell half a percent to close at 52,163.84 after the country returned from a Monday holiday. Australia saw bigger drops, with its primary market falling nearly one percent to finish at 8,818.00. South Korea experienced the steepest decline in the region, dropping two percent to settle at 4,138.88.

Meanwhile, Hong Kong bucked the downward trend with a modest rise of 0.2 percent, reaching 26,209.39. The Shanghai market posted a small decrease of 0.2 percent, ending the day at 3,969.05.

Wall Street’s AI stars lead market higher

The varied results in Asia came after American markets posted another day of gains powered largely by companies working on AI technology. The main U.S. stock measure increased 0.2 percent, moving closer to the record high it reached last week. However, this overall gain masked weakness across most individual stocks in that index.

The industrial average in the U.S. fell 226 points, representing a drop of half a percent as reported by AP news. The technology-heavy index climbed half a percent.

The chip company that makes processors for AI systems provided the biggest boost to the main American stock measure, continuing its pattern from earlier this year. Nvidia’s shares rose 2.2 percent, pushing its total gain so far this year to 54.1 percent.

The online retail and cloud computing giant ranked as the second-biggest contributor to market gains. Its shares jumped four percent after revealing a $38 billion partnership with the company behind ChatGPT, which will rely on the retailer’s cloud infrastructure to handle its AI operations.

An AI cloud service company called IREN saw its stock surge 11.5 percent following news of a $9.7 billion agreement with a major technology firm that will provide access to specialized chips.

A data analysis company that had already climbed 165 percent this year added another 3.3 percent as traders bought shares ahead of its quarterly financial report released after the market closed.

Profit growth critical as bubble concerns mount

Companies throughout the American stock market face pressure to demonstrate solid profit growth to support the large increases in their share prices since April. As Cryptopolitan noted growing numbers of market watchers have raised concerns that stocks overall, and AI-related companies especially, have become overpriced and might be forming a risky bubble similar to what happened in 2000 when internet stocks crashed.

So far, most companies have met the high expectations investors set for them. Four out of every five companies in the main index have beaten what analysts predicted for this reporting period, according to data from FactSet. With about two-thirds of companies having reported, the group is on pace to show healthy profit increases of nearly 11 percent compared to the same time last year.

Not all companies saw positive results. A consumer products maker dropped 14.6 percent after announcing it would purchase another consumer goods company in a transaction valued at $48.7 billion. The company being acquired, which sells pain relievers, bandages, and mouthwash, jumped 12.3 percent.

When the final numbers came in, the main U.S. index rose 11.77 points to finish at 6,851.97. The industrial index fell 226.19 points to close at 47,336.68, while the technology index gained 109.77 points to end at 23,834.72.

Bond markets hold steady as manufacturing disappoints

Government bond yields showed little change, with the benchmark 10-year rate edging down to 4.10 percent from 4.11 percent.

A disappointing report on American factory activity showed that the sector contracted more than expected last month. Multiple manufacturers told researchers that tariffs imposed by President Donald Trump are causing financial strain.

In commodity markets, U.S. oil prices dropped 13 cents to $60.92 per barrel. The international benchmark fell 15 cents to $64.74 per barrel.

Currency markets saw the dollar weaken slightly to 153.95 yen from 154.19 yen. The euro traded at $1.1517, down from $1.1525.

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