AI Skepticism Triggers Global Tech Sell-Off: Asian Markets Retreat as Inflation Fears Loom

Concerns over whether artificial intelligence stocks are priced too optimistically spread from U.S. markets to Asia on Thursday, triggering broad declines across major stock benchmarks. The sell-off followed the steepest one-day drop on Wall Street in several weeks. Market participants remained on edge ahead of key economic signals, including upcoming U.S. inflation data and a closely watched policy decision from Japan’s central bank. Economists expect the Bank of Japan to raise its benchmark interest rate by 0.25 percentage points in an effort to curb rising prices, despite recent data indicating that the country’s economy contracted in the prior quarter.

Japanese equities were among the hardest hit. The Nikkei 225 fell 1% to close at 49,001.50, led lower by technology stocks. Shares of SoftBank slid 4%, while chip-related firms Tokyo Electron and Advantest each declined by more than 3%. Automakers also struggled, with Honda Motor Co. dropping over 2% following reports that ongoing semiconductor shortages had forced production stoppages at plants in Japan and China. Elsewhere in the region, South Korea’s Kospi index sank 1.5% to 3,994.51, pressured by a 3.1% loss in LG Electronics and a slight pullback in Samsung Electronics.

The global weakness traced back to Wednesday’s U.S. session, when the Nasdaq composite fell 1.8% and the S&P 500 lost more than 1%. Although most S&P 500 constituents ended the day higher, sharp declines among major artificial intelligence companies dominated overall performance. Investors are increasingly questioning whether the vast sums being invested in AI infrastructure will deliver returns sufficient to support current valuations, particularly as some companies accumulate significant debt. Nvidia shares slid nearly 4%, while Oracle dropped 5.4% and AI-focused firm CoreWeave fell by more than 7%.

Energy stocks stood out as one of the few areas of strength. After the U.S. president ordered restrictions on oil tankers linked to Venezuela, crude prices rose more than 1% to around $55.94 per barrel. That move lifted shares of Devon Energy by over 5% and pushed ConocoPhillips up 4.6%. In foreign exchange trading, the U.S. dollar advanced against the Japanese yen to 155.90, while the euro remained largely unchanged near $1.1746. Looking ahead, investors are watching whether persistent inflation pressures could further darken the global economic outlook.