Published Wed, Oct 7, 2026 · 09:42 AM — Updated Wed, Oct 7, 2026 · 01:33 PM

ASIAN stocks slipped, in contrast to Wall Street’s record-setting rally, as enthusiasm over the corporate earnings outlook failed to carry over to the region. Treasuries fell as oil climbed.

MSCI’s Asia Pacific equities gauge dropped 0.6 per cent as technology shares in South Korea and Hong Kong turned lower.

Among the main moves in markets, the S&P 500 futures were little changed as at 12.58 pm Tokyo time.

The Nikkei 225 futures (OSE) fell 0.7 per cent, Japan’s Topix slipped 0.4 per cent, Australia’s S&P/ASX 200 was little changed and Hong Kong’s Hang Seng dropped 0.5 per cent.

The weakness contrasted with tech-led gains on Wall Street, where optimism over the sector’s earnings pushed the S&P 500 Index and Nasdaq 100 Index to all-time highs ahead of the US reporting season next week.

As sentiment worsened, US equity index futures reversed earlier gains, while those for European shares also dropped.

The US dollar strengthened against all its Group of 10 peers, while Bitcoin dropped 1.6 per cent to about US$84,200.

Oil gained after Iran increased the pace of attacks on tankers in the Strait of Hormuz in recent days.

Brent crude rose almost 1 per cent to about US$101.50 a barrel.

Higher oil prices saw Treasuries drop across the curve, with benchmark 10-year yields climbing three basis points to 5.31 per cent.

French bond futures underperformed German equivalents in Asian trading as investors weighed the prospects for France’s deficits.

The weakness in Asian tech shares – often seen as the picks and shovels of the artificial intelligence buildout – contrasts with growing confidence that Corporate America can withstand elevated energy costs and higher interest rates.

With the economic data calendar light, the upcoming US earnings season will test whether hundreds of billions of dollars in AI-related spending by tech giants are translating into stronger profits.

“There’s a sense that Asian markets are starting to lose some of the relative momentum they enjoyed earlier,” said Tim Waterer, chief market analyst at KCM Trade.

“After a period of outperformance, the lack of fresh catalysts combined with still-elevated oil and bond yields is leaving the region looking a little tired.”

US shares continue to push higher on earnings optimism, shifting attention back to Wall Street as Asian markets move in the opposite direction, he said.

Analysts expect a roughly 25 per cent increase in third quarter S&P 500 profits from a year earlier, according to data compiled by Bloomberg Intelligence.

Bloomberg strategists noted: “Asian and European equities are at risk of falling further behind US peers as the relentless AI boom spurs more money to head stateside. The ‘sell America’ narrative of early 2025 looks to have completely evaporated.”

Nvidia’s market value approached US$6 trillion, underscoring the strength of the AI trade.

Meanwhile, Elon Musk’s SpaceX was in talks with banks and investors to raise US$40 billion of debt to buy Nvidia chips, people familiar with the matter said.

Wall Street and Asia are starting to show very different tolerance levels for higher yields, said Hebe Chen, a market analyst at Vantage Global Prime.

“In the US, a narrow group of cash-rich AI and megacap names still has enough earnings firepower to outrun the higher cost of capital, while in Asia higher yields bite from several directions at once – valuations, currencies, foreign capital flows and the room for central banks to ease,” she said.

In Asia, attention is also on the diverging performance of Taiwanese and South Korean stocks.

The Taiex Index beat the Kospi by about 23 percentage points last quarter, the widest margin since the turn of the century.

Chip bellwether Samsung Electronics is expected to report its largest-ever quarterly profit when it announces preliminary earnings on Thursday (Oct 8).

Blowout numbers alone may not be enough to reassure investors that memory chip demand is durable and high product prices can be locked in through long-term contracts.

While US stocks soared to records, elevated oil prices, bond yields at multi-year highs and swings in currency markets are still capturing macro traders’ attention.

“Underlying issues that have been in the driver’s seat remain unresolved,” Peter Dragicevich, a currency strategist for Apac at Corpay, wrote in a note.

“The backdrop points to more bursts of volatility down the track. Recent history shows the more upbeat tone in markets observed overnight may not last too long.” BLOOMBERG