14/10/2026 04:20 AST
Asian stocks were mixed on Wednesday as investors tried to recover some of the previous day's steep tech losses, with attention turning to US inflation data and upcoming earnings from key AI-linked firms.
Tech firms were hammered on Tuesday by concerns over China's progress in developing AI chips and by comments from Broadcom's chief executive likening the AI buying frenzy to gambling.
The turmoil in Seoul, Tokyo and Taipei, markets heavily weighted toward tech, saw giants SK hynix, Advantest and TSMC suffer big losses that pushed them back toward levels last seen after their summer rout.
All three markets bounced on Wednesday as the same firms recovered, with Seoul and Taipei both up more than 1 percent. Shanghai and Singapore also rose, but Hong Kong, Sydney, Wellington and Manila fell.
The gains were helped by hopes that the US Federal Reserve could avoid raising interest rates again next year, after the head of the New York Fed suggested policymakers could hold off after one more increase this year.
"I haven't changed my view that it may be appropriate to have one more rate hike," John Williams told Bloomberg News. "I don't think at this time I have any reason to believe that we would need to do more" after that.
He said there were signs that inflation would fall toward the Fed's 2 percent target next year as the effects of tariffs and the energy price shock faded.
All eyes are on US consumer price data due later on Wednesday, which could play a key role in whether the Fed raises rates for a second consecutive meeting on Oct 28.
"After another disappointing (non-farm payrolls) report, the third in the last four months, the Fed is stuck between a rock and a hard place," said Matt Weller of FOREX.com.
"The labor market is showing signs of deteriorating, while price pressures have remained above the central bank's target for more than five years. Markets are currently pricing in about a one-in-four chance that the central bank will raise interest rates at its meeting... setting a relatively high bar to tip the FOMC (Federal Open Market Committee) toward another rate hike."
Chip earnings
Investors are also awaiting earnings this week from Dutch giant ASML and Taiwan's TSMC. ASML is a key bellwether for the semiconductor sector, while TSMC makes advanced processors for companies including Nvidia and Apple.
"After a strong first half (of 2026), semiconductor stocks have come under pressure as higher bond yields, geopolitical uncertainty and concerns about the scale of AI capital expenditure have prompted investors to reassess valuations," said Charu Chanana of Saxo Markets.
"The recent selloff across US and Asian chipmakers suggests that strong demand alone may no longer be enough to sustain the rally."
The results of ASML and TSMC "offer a useful health check on the AI investment cycle", she said. "TSMC tells us whether demand for advanced chips continues to accelerate, while ASML tells us whether chipmakers are investing in enough equipment to meet that demand."
Hormuz attacks
Oil prices rose more than 1 percent amid concern over the Middle East crisis, with Iran stepping up attacks in the Strait of Hormuz and the Houthis pressing on with their strikes on Saudi Arabia, the world's top oil exporter.
UK Maritime Trade Operations said four tankers were struck in the strait on Oct 11. Bloomberg said that was about double the average the agency had recorded the previous week.
Saudi Arabia and the Houthis have also exchanged attacks following deadly strikes on Riyadh's international airport and energy sites in recent days.
Key figures at around 0230 GMT
Tokyo - Nikkei 225: UP 0.6 percent at 68,193.13 (break) Hong Kong - Hang Seng Index: DOWN 0.2 percent at 24,291.19 Shanghai - Composite: UP 0.1 percent at 3,805.98 West Texas Intermediate: UP 1.2 percent at $95.24 per barrel Brent North Sea Crude: UP 1.2 percent at $106.96 per barrel Euro/dollar: UP at $1.1205 from $1.1200 on Tuesday Pound/dollar: UP at $1.3266 from $1.3256 Dollar/yen: UP at 158.37 yen from 158.32 yen Euro/pound: DOWN at 84.47 pence from 84.49 pence New York - Dow: DOWN 0.4 percent at 51,670.10 (close) London - FTSE 100: DOWN 0.1 percent at 10,650.33 (close).
AFP
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