(Bloomberg) — Asian stocks were mixed at the open after US shares extended their losing streak to the longest since January.

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Japanese stocks fell from the start of trade while Australian and South Korean equities rose. Equity futures in Hong Kong indicate early losses while similar contracts in China gained. US futures were little changed after the S&P 500 fell for a fourth day Wednesday, extending declines from last week’s record high to more than 4%.

Asian chipmakers such as Taiwan Semiconductor Manufacturing Co., which reports earnings later Thursday, and Tokyo Electron Ltd. will be closely watched in early trading. Europe’s most valuable tech firm ASML Holding NV said Wednesday orders tumbled in the first quarter, and its China sales are likely to be hampered by US export control measures. Nvidia Corp. led losses in US megacaps.

ASML’s earnings are “a little bit of a warning shot across the bow ahead of some of the megatech stocks which are reporting next week,” said Tony Sycamore, a market analyst at IG Australia in Sydney. “There could be a little bit of nerves creeping into semiconductor stocks. Anything with that semiconductor exposure, it’s going to be a pretty tough day.”

Meantime, Micron Technology Inc., the largest US maker of computer-memory chips, is poised to get more than $6 billion in grants from the Commerce Department to help pay for domestic factory projects, according to people familiar with the matter. It’s part of an effort to bring semiconductor production back to American soil.

Investors have been increasingly skeptical about how much further US stocks can go after their 10% rally in the first quarter — the strongest start to a year since 2019. The latest pullback takes place even as US data point to continued strength in the economy.

Just a day after Jerome Powell threw cold water on rate-cut bets, dip buyers emerged in the Treasury market, with two-year yields dropping further below 5% and a $13 billion sale of 20-year bonds drawing solid demand. The benchmark 10-year Treasury yield was steady in Asian trading.

“The US central bank remains on track to cut rates twice this year, most likely starting at its September meeting,” said Solita Marcelli, chief investment officer for the Americas at UBS Group AG’s wealth management unit. “This means the return outlook for quality bonds remains positive and attractive, and that recent losses in fixed income are likely to be temporary.”

Story continues

The dollar was little changed in Asia after falling for the first time in six days Wednesday as officials in Japan and Korea continued to express concern over the declines in their currencies. The yen has fallen almost 9% and the won has dropped roughly 7% this year against the dollar.

Read more: Yellen Acknowledges Japan, S. Korea Worries Over Yen, Won

The equity risk premium for US equities — a measure of the differential between stocks and bonds’ expected returns — is now deep in negative territory, something that hasn’t happened since the early 2000s.

While this isn’t necessarily a negative indicator for the stock market, it all depends on the economic cycle. The lower premium can be seen as a promise of a future boost in corporate profits, but also that a bubble is in the making.

Fundamentals and technical trends for equity markets still appear supportive, suggesting the recent pullback should prove temporary, according to HSBC strategists led by Max Kettner.

“Sentiment and positioning are not flashing a warning signal, though real money investors have started to extend their constructive stance on equities lately, they wrote.

Elsewhere, oil held most of Wednesday’s 3% decline, weighed by weaker Chinese industrial data and as US crude inventories swelled, while gold edged higher.

Key events this week:

• Taiwan Semiconductor earnings, Thursday

• US Conf. Board leading index, existing home sales, initial jobless claims, Thursday

• Fed Governor Michelle Bowman speaks, Thursday

• New York Fed President John Williams speaks, Thursday

• Atlanta Fed President Raphael Bostic speaks, Thursday

• BOE Deputy Governor Dave Ramsden and ECB Governing Council member Joachim Nagel speak, Friday

• Chicago Fed President Austan Goolsbee speaks, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 9:03 a.m. Tokyo time

• Japan’s Topix fell 0.3%

• Australia’s S&P/ASX 200 rose 0.2%

• Hang Seng futures fell 0.5%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.0666

• The Japanese yen was little changed at 154.36 per dollar

• The offshore yuan was little changed at 7.2450 per dollar

• The Australian dollar was little changed at $0.6436

Cryptocurrencies

• Bitcoin rose 0.8% to $61,349.89

• Ether rose 0.6% to $2,990.6

Bonds

• The yield on 10-year Treasuries was little changed at 4.59%

• Japan’s 10-year yield was little changed at 0.875%

• Australia’s 10-year yield declined five basis points to 4.33%

Commodities

• West Texas Intermediate crude rose 0.1% to $82.80 a barrel

• Spot gold rose 0.3% to $2,369.07 an ounce

This story was produced with the assistance of Bloomberg Automation.

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