AI-led tech rout and Iran-Israel strikes hit Asian markets

Asian markets fell sharply on Monday as heavy selling in technology and semiconductor stocks coincided with fresh Iran-Israel missile exchanges. Investors reduced positions across the region while crude oil climbed.

Global technology benchmarks extended losses after a steep selloff in New York on Friday. The Nasdaq 100 dropped 4.8% and a broad chipmaker gauge slid about 10% in its worst single-session rout in months. Asian trading opened with South Korea’s Kospi nearly 7% lower after a 5.5% fall on Friday, and Japan’s Nikkei 225 fell around 5%.

Other regional indices also moved lower. The Hang Seng fell about 1.7%, China A50 slipped 1.6%, CSI 300 lost 2.4%, the ASX 200 dipped 0.7% and Singapore’s STI slid 1.4%.

The tech selloff followed weaker guidance from AI-related companies including Broadcom and renewed concern over valuations in AI-linked stocks. Traders also sold liquid equities to free cash ahead of major private listings this week, including a planned SpaceX offering priced at $135 per share targeting about $75 billion and a confidential IPO filing by Anthropic reportedly aiming at a near-$1 trillion valuation.

Geopolitical risk rose after Iran launched a large salvo of missiles toward Israel following an Israeli strike in Beirut. The exchanges pushed oil prices higher. West Texas Intermediate crude gapped up about 3% in Asian trade to around $95 a barrel, while Brent traded near $95.40.

Short-term technical levels cited by market analysts placed WTI support near $91.40, with initial resistance around $95.45 and a further target close to $100 per barrel.

Stronger U.S. labour data added pressure on markets. May nonfarm payrolls increased by 172,000 versus a consensus forecast of 85,000, and the unemployment rate held at 4.3%. Futures tied to the federal funds rate priced in roughly a 60% probability of a Federal Reserve hike by October 2026. Two-year Treasury yields rose about 10 basis points to 4.15% on Friday and the 10-year yield reached roughly 4.57% in early Asian trade.

The stronger dollar weighed on regional currencies. The euro traded near $1.1519, the pound around $1.3317, the Australian dollar about $0.7022 and the yen weakened toward 160.30 per dollar. The South Korean won slid to about 1,559 per dollar, its weakest level since 2009, prompting emergency measures by Seoul to support the currency. Bank of Japan officials monitored for possible intervention as the yen remained under pressure.

Spot gold fell as markets adjusted to higher-for-longer rate expectations. Traders remained cautious ahead of Chinese trade balance data and further developments in the Middle East and U.S. monetary policy.