BANGKOK (AP) — Tokyo’s benchmark Nikkei 225 index tumbled more than 4% on Wednesday and other shares in Asia also sank after a retreat on Wall Street spurred by selling of Big Tech shares.
U.S. futures
were slightly lower and oil prices also fell.
The Nikkei was trading down 4.7% at 49,104.05 by midday.
Shares in computer chip maker Tokyo Electron dropped 6.1% while stock in Advantest Corp., a maker of semiconductor testing equipment, lost 10%.
South Korea's Kospi declined 3.7% to 3,977.24 as the country's big tech companies followed others downward.
Samsung Electronics shed 4.4% and SK Hynix, which had logged major gains thanks to plans to develop artificial intelligence with chip maker Nvidia, lost 2.7%.
Chinese markets were less affected. The Shanghai Composite index slipped 0.3% to 3,946.78, while Hong Kong's Hang Seng declined 1.1% to 25,656.90.
Investors took fright from heavy selling of high tech related shares overnight on Wall Street. The technology sector has been driving gains this year, and huge values for companies including Nvidia and Microsoft give them outsize influence over the broader market’s direction
Palantir Technologies, which had more than doubled so far this year, fell 7.9% despite reporting results that beat analysts’ forecasts. Nvidia also reversed course from a day earlier, falling 4%, while Microsoft fell 0.5%.
Other sectors also declined, leading the S&P 500 to fall 1.2% to 6,771.55. The index set its most recent all-time high last week, and is still up more than 15% for the year.
The Dow Jones Industrial Average fell 0.5% to 47,085.24. The technology heavy Nasdaq fell 2% to 23,348.64.
Wall Street remains focused on corporate earnings. Roughly three out of every four companies within the S&P 500 have reported their latest results, which have been mostly better than analysts expected.
Uber slumped 5.1% despite reporting financial results that beat analysts' expectations.
Several big companies will report their latest financial results later this week, including McDonald's, Expedia Group and Qualcomm.
The latest round of corporate profit reports and forecasts have taken on more significance for Wall Street due to the U.S. government shutdown. Investors and economists are trying to gauge the health and direction of the U.S. economy without the latest economic updates on inflation and employment.
The lack of timely economic data has also left the Federal Reserve without many of the resources it needs to make decisions on interest rate policy. That has added more doubts to whether the central bank will continue cutting its benchmark interest rate amid stubborn inflation and a weakening job market.
Consumer prices rose 3% in September, the highest increase since January. At the same time, hiring has stalled. That mix of conditions puts the Fed in a tough position. Cutting rates to help the economy endure a weakening job market could also result in hotter inflation.
The government shutdown has already resulted in a lack of monthly employment data for September and will likely result in a lack of data on consumer prices for October.
Outside of earnings, Tesla fell 5.1% after Norway’s sovereign wealth fund, one of the electric car maker’s biggest investors, said Tuesday that it will vote against a proposed compensation package that could pay CEO Elon Musk as much as $1 trillion over a decade.
There will be more than a dozen company proposals up for a vote Thursday during Tesla’s annual meeting, but none have generated more division than Musk’s potentially massive pay package.
Yum Brands jumped 7.3% after the company said it is considering selling its Pizza Hut unit, which has struggled to compete in a crowded pizza market.
Novo Nordisk slipped 1.8% after it raised its offer to buy drugmaker Metsera, which jumped 20.5%. Novo Nordisk is trying to outbid rival Pfizer, which fell 1.5%.
In other dealings early Wednesday, U.S. benchmark crude oil lost 31 cents to $60.25 per barrel. Brent crude, the international standard, shed 28 cents to $64.16 per barrel.
The dollar fell to 153.33 Japanese yen from 153.63 yen. The euro rose to $1.1493 from $1.1488.
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AP Business Writer Damian J. Troise contributed.
