Asian stocks were broadly steady on Tuesday as a rebound in artificial intelligence shares helped offset some of the pressure from Monday’s technology selloff.
However, investor sentiment remained cautious as oil prices stayed above $107 a barrel and global bond yields continued to rise ahead of a key Federal Reserve decision.
In Asian trading, Nasdaq 100 futures edged higher, while S&P 500 futures slipped to 7,691.50.
AI Shares Rebound After Monday’s Selloff
Investors were reassessing the recent selloff in AI-related stocks after several leading technology figures called for stronger safeguards and a slower pace of development.
Markets are now weighing how tighter AI oversight could affect corporate spending, earnings, and investment across the technology supply chain.
The rebound was visible across several major semiconductor stocks.
SK Hynix rose 1.62%, Samsung Electronics gained 0.9%, and Kioxia climbed 2.73%.
Asian Stock Markets Trade Mixed
South Korea’s KOSPI rose 0.19%, while Japan’s Nikkei 225 gained 0.8%.
Hong Kong’s Hang Seng fell 0.5% to 24,791, while the MSCI Asia Pacific index remained broadly unchanged.
Elsewhere, Australia’s S&P/ASX 200 declined 0.9%.
Singapore’s Straits Times fell 1.04%, while Indonesia’s Jakarta Composite slipped 0.61%.
India’s Nifty 50 moved slightly higher, gaining around 0.2%.
AI Safety Debate Remains in Focus
Anthropic CEO Dario Amodei has called for a slower approach to developing the most advanced AI models.
He has also supported stronger safeguards, including independent third-party evaluations, amid concerns that highly advanced systems could become difficult to control.
OpenAI CEO Sam Altman also supported a more cautious approach, while Elon Musk backed calls for additional safeguards.
Meanwhile, U.S. President Donald Trump pushed back against some of the concerns as American companies continue competing aggressively with Chinese AI rivals.
OCBC Remains Positive on Equities
OCBC Head of Wealth Advisory Chez Anbu said the bank remains moderately positive on global equities.
The bank continues to believe that the long-term AI-driven bull market remains intact.
OCBC is overweight U.S. equities, neutral on Japan and Asia excluding Japan, and underweight European markets.
Rising Bond Yields Keep Pressure on Stocks
Bond markets also remained under pressure.
U.S. Treasuries weakened after the government bought back fewer 10- to 20-year securities than investors had expected.
Global government bond yields remain elevated as investors demand higher returns for holding long-term debt.
Widening fiscal deficits, heavy government borrowing, and financing requirements linked to AI investment have all contributed to higher yields.
Rising yields can weigh on stock valuations because they increase borrowing costs and reduce the present value of future corporate earnings.
China Stocks Gain Despite Uneven Growth
Mainland Chinese stocks moved slightly higher.
The CSI 300 gained around 0.1%, while the Shanghai Composite also rose 0.1%.
Recent economic data showed that China’s industrial activity remained relatively resilient in August.
However, weaker consumer spending and investment continued to highlight an uneven economic recovery.
Hong Kong technology stocks were mixed, with Alibaba, Tencent, Baidu, and JD.com all recording gains.
Fed Rate Decision Takes Center Stage
Investors are also focused on the upcoming Federal Reserve policy decision.
Markets are pricing in a probability of more than 90% that the Fed will raise interest rates on Wednesday.
Three Federal Reserve officials supported a rate hike at the July meeting, highlighting continued concerns about inflation.
Higher oil prices have added to those concerns.
With crude trading above $100 a barrel and tensions in the Middle East intensifying, policymakers may have limited scope for near-term relief from inflationary pressures.
Bank of England and BOJ Decisions Also Ahead
The Federal Reserve will not be the only major central bank in focus this week.
Policy decisions from the Bank of England and Bank of Japan are also expected.
Together, these announcements could influence global bond yields, currencies, and equity markets.
For now, Asian stocks are holding relatively steady as the AI rebound provides support, while rising oil prices, elevated bond yields, and central bank uncertainty continue to limit investor confidence.
