(Bloomberg) — Stocks in Asia are set to follow a US selloff after a disappointing outlook from Europe’s most-valuable tech firm and concern about tighter US curbs on chip sales hit the industry that’s powered the bull market.

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Futures for Tokyo, Hong Kong and Sydney pointed to drops after the S&P 500 fell 0.8% and a closely watched gauge of semiconductor firms plunged the most since early September. ASML Holding NV sank 16% after the Dutch giant cut its guidance for 2025 while Nvidia Corp. lost 4.5% on news US officials have discussed capping sales of advanced AI chips to some countries.

Investors got so bullish that it might be time to sell global stocks, according to an investor survey by Bank of America Corp. Allocations to equities surged, while bond exposure sank and cash levels in global portfolios fell to 3.9% in October from 4.2% last month, triggering a “sell signal”, strategists led by Michael Hartnett wrote.

“US equity markets, skewed more toward large-cap leadership, are seeing profit-taking today as earnings season ramps up against overbought/extended charts,” said Dan Wantrobski at Janney Montgomery Scott.

The S&P 500 slipped to around 5,815 and the Nasdaq 100 lost 1.4%. The dollar climbed to the highest level in about two months after former President Donald Trump defended proposals to dramatically raise tariffs on foreign imports. Treasury 10-year yields declined seven basis points to 4.03%.

Oil clawed back some gains in early trading after plunging Tuesday following a report that Israel may avoid targeting Iran’s crude infrastructure, easing concerns about a potential supply disruption.

In Asia, traders will be watching China stocks after the housing minister announced a press briefing on Thursday that’s expected to provided more details of support measures for the property sector. A gauge of US-listed Chinese shares slumped almost 6% overnight, while the CSI 300 index lost more than 3% on Tuesday as doubts resurfaced about Beijing’s stimulus blitz.

With the S&P 500 holding over 5,800, UBS Group AG’s Jonathan Golub and Patrick Palfrey were the latest to raise their year-end call for the gauge. They boosted it to 5,850 from 5,600 — while lifting their 2025 forecast to 6,400 from 6,000.

“Fiscal and monetary policy uncertainty, and potential election outcomes, make 2025 returns far from certain,” Golub wrote. That didn’t prevent him from betting that the stock market can keep powering on, noting that risks are skewed to the upside, with moderating inflation, rate cuts, improvement in low-end consumer and business activity and broad-based profit strength.

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To Scott Rubner at Goldman Sachs, US stocks are set to extend their rally into the final months of the year, pushing the S&P 500 past 6,000, as corporate buyers re-enter the market and institutional investors drop their hedges.

Corporate Highlights:

• Johnson & Johnson reported stronger-than-expected third-quarter earnings, driven by surging sales of the cancer medicine Darzalex.

• Charles Schwab Corp. reported earnings per share that topped analyst estimates and curbing some of its expensive debt — a sign the firm has moved past a bout of turbulence last year.

• PNC Financial Services Group Inc. pulled in more net interest income than analysts expected in the third quarter, another period of sequential growth for the bank’s biggest source of revenue as the firm continues to predict a record haul next year.

• Walgreens Boots Alliance Inc. plans to close 14% of its US stores to cut costs as consumers pull back spending.

• PG&E Corp. said it may need to cut power to homes and businesses across a large portion of California starting later this week when dry, gusty winds are expected to sweep across the state.

• LVMH’s sales of fashion and leather goods fell for the first time since the pandemic as the industry’s biggest player was hammered by a slump in demand from Chinese consumers whose appetite for high-end purchases once seemed insatiable.

• Adidas AG raised its annual profit target for the third quarter in a row amid the sustained boom for retro sneakers like the Samba and more sales from its shrinking stockpile of Yeezy footwear.

Key events this week:

• Morgan Stanley earnings, Wednesday

• ECB rate decision, Thursday

• US retail sales, jobless claims, industrial production, Thursday

• Fed’s Austan Goolsbee speaks, Thursday

• China GDP, Friday

• US housing starts, Friday

• Fed’s Christopher Waller, Neel Kashkari speak, Friday

Some of the main moves in markets:

Stocks

• Hang Seng futures fell 1.3% as of 6:58 a.m. Tokyo time

• S&P/ASX 200 futures fell 0.4%

• Nikkei 225 futures fell 2.4%

Currencies

Cryptocurrencies

• Bitcoin fell 0.2% to $66,366.01

• Ether rose 0.4% to $2,582.57

Bonds

Commodities

This story was produced with the assistance of Bloomberg Automation.

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