Asian Stocks Slip, Is Rotation Away From Tech Again?
Asian stocks mostly weakened, following the sell-off in technology stocks in the United States that dragged down major Wall Street indexes. Behind the correction, the market appeared to be shifting gears toward sectors more sensitive to economic cycles—a sign of a growing rotation.
Early in the session, Japanese stocks opened lower, while futures pointed to weakness in Hong Kong. A sharp decline in software stocks in US trading weighed on the S&P 500 and Nasdaq 100, dampening risk appetite in Asia.
An additional trigger came after the US market close: Advanced Micro Devices released disappointing forecasts. AMD has long been known as Nvidia's main challenger in the AI processor market—so the less-than-stellar outlook quickly impacted market participants' psychology.
Interestingly, despite the decline in major indexes, most stocks in the S&P 500 actually rose—strengthening the rotation narrative. FedEx continued its rally to a record, while Walmart surpassed $1 trillion in market capitalization. This means the market isn't truly "total risk-off," but more like a shift from tech to other sectors.
The initial sell-off occurred in stocks related to legal software and data services. Experian, London Stock Exchange Group, and Thomson Reuters all fell, and the effect then spread to almost the entire software sector—driving the iShares Expanded Tech-Software Sector ETF down around 4.5%. Even Goldman Sachs' "basket" of software stocks plunged 6%, its biggest daily decline since the April sell-off triggered by tariffs.
In other assets, Bitcoin fell for a second day, extending its downward trend over the past few months. Oil prices actually rose after the US Navy shot down an Iranian drone heading towards an aircraft carrier in the Arabian Sea. The dollar strengthened slightly early Wednesday after weakening in the US session, while US government bonds remained relatively stable—the market digested comments from Federal Reserve Bank of Richmond official Tom Barkin and Fed Governor Stephen Miran about the direction of interest rates this year. (asd)
Source: Newsmaker.id
