Asian Stocks Fall as Chip Optimism Fades Ahead of More Trump-Xi Talks
Most Asian stock markets moved lower on Friday as concerns over future semiconductor sales to China weighed on chipmaking companies. Investors also remained focused on ongoing discussions between U.S. President Donald Trump and Chinese President Xi Jinping in Beijing.
Chinese equities held near multi-year highs as markets waited for additional details from the high-level talks between the world’s two largest economies.
Meanwhile, South Korean stocks recorded the steepest losses in the region following comments from a U.S. trade official regarding semiconductor export restrictions.
Asian Markets Ignore Wall Street Record Highs
Asian investors largely overlooked a positive lead from Wall Street, where major U.S. indexes reached record highs on Thursday.
Earlier optimism had been driven by reports suggesting the U.S. may allow expanded chip sales to China, boosting technology shares.
However, sentiment weakened after S&P 500 Futures slipped 0.2% during Asian trading hours, increasing expectations that semiconductor stocks could reverse recent gains.
South Korean Stocks Lead Regional Declines
South Korea’s KOSPI index was the weakest performer in Asia, dropping 3.5% amid sharp losses in major chip manufacturers.
Other semiconductor-related stocks across the region also declined.
Japanese chip companies experienced notable pressure, with shares of major industry firms falling between 1% and 6%.
The selloff intensified after U.S. Trade Representative Jamieson Greer stated that semiconductor export controls were not discussed in detail during recent U.S.-China meetings.
Greer also suggested future purchases of U.S. chips would ultimately depend on China’s decisions.
Nvidia Optimism Fades as Uncertainty Returns
The comments overshadowed earlier reports indicating Nvidia had received approval to sell its H200 artificial intelligence chip to selected Chinese companies.
Despite reports that no deliveries had occurred, semiconductor stocks rallied strongly on Thursday in anticipation of improving U.S.-China technology relations.
Renewed uncertainty over export restrictions later reduced investor confidence across the sector.
Chinese Markets Hold Near Multi-Year Highs
Chinese equities remained relatively stable despite broader weakness across Asia.
The CSI 300 Index and Shanghai Composite Index traded near highs not seen in several years, supported by hopes for improving U.S.-China relations.
Investors continued watching developments from additional talks between Trump and Xi scheduled later on Friday.
Earlier comments from Trump suggested China could increase purchases of U.S. oil and Boeing aircraft, while Chinese officials said both countries reached agreements on several topics without revealing specifics.
Japan Faces Inflation Pressure as Oil Costs Rise
Japanese markets also declined following stronger-than-expected inflation data.
Japan’s Nikkei 225 fell 1.6%, while the TOPIX index lost 0.3% after producer price inflation exceeded forecasts in April.
Higher oil and chemical costs linked to tensions involving Iran contributed to inflation pressures.
The data increased speculation that the Bank of Japan could consider additional interest rate increases if inflation remains elevated.
Broader Asian Markets Show Mixed Performance
Elsewhere in the region:
- Hong Kong’s Hang Seng Index fell 1%, pressured by weakness in technology shares
- Singapore’s Straits Times Index declined 0.1%
- Australia’s ASX 200 remained broadly unchanged
- India’s Nifty 50 gained 0.4% in early trading
Market sentiment across Asia remains heavily influenced by semiconductor policy, geopolitical developments and expectations surrounding U.S.-China relations.
