On Thursday (2 July, 9:21 AM, GMT+7, Bangkok time), most major indices in the Asia Pacific retreated, weighed down by renewed selling in chip manufacturers that has raised questions about the sustainability of the recent surge in AI-related shares. The Kospi Index in South Korea led regional losses, temporarily halting trading after plunging more than 5%.
Samsung Electronics saw its stock fall by more than 7%, while SK Hynix experienced an even steeper drop of over 9%. The declines followed steep losses among major chip stocks in the U.S. overnight.
Financial markets are processing a pivotal shift in tone from the Federal Reserve, as Chairman Kevin Warsh indicated that the immediate dangers of inflation have diminished notably in recent weeks. While the central bank remains steadfast in its mission to restore price stability, the acknowledgment of cooling pressures has strengthened the case for potential interest rate reductions. Still, Warsh did not indicate any specific figures that could reference his comment.
Chipmakers continued to set the tone in equities markets, with their losses stoking caution among investors. However, statements from Warsh and several central bankers indicating that inflation risks have become more balanced provided some reassurance in the broader market.
In the U.S., the pullback in the “Magnificent Seven” was described by Wells Fargo president Darrell Cronk as a constructive correction. Cronk noted that the latest retreat is not a major shift but signals a movement from the early AI growth story toward a focus on measurable profitability. He indicated continued confidence in the technology sector, while recommending greater selectivity in stock choices following recent declines.
Investor attention is now turning toward upcoming U.S. employment figures, due Thursday, for indications on monetary policy direction.
Separately, in the Middle East, progress was reported in discussions aimed at solidifying a peace agreement. According to a senior U.S. official, American negotiators Steve Witkoff and Jared Kushner held constructive talks in Qatar, advancing technical dialogue with Iran about transforming a temporary peace pact into a lasting settlement to the conflict. President Donald Trump stated that the negotiations were proceeding positively, mentioning that advances are being made toward denuclearization.
Japan’s NIKKEI lost 1.04% to 69,745.23. South Korea’s KOSPI slumped by 2.93% to 8,059.95, and Australia’s ASX 200 decreased by 0.11% to 8,713.70.
As for stocks in China, Shanghai’s SSEC sild by 0.67% to 4,084.90, Shenzhen’s SZI plummeted by 2.15% to 15,772.83, while Hong Kong’s HSI rose by 1.26% to 23,169.14.
The U.S. stock markets edged down on Wednesday as the Dow Jones Industrial Average (DJIA) dipped by 0.03% to 52,305.24. NASDAQ dropped by 0.66% to 26,040.03, and S&P 500 contracted by 0.22% to 7,483.23. VIX surged 0.85% to 16.59.
As for commodities, oil prices settled lower on Wednesday, following renewed confidence surrounding U.S.-Iran negotiations, which eased worries about potential disruptions to global supply. Brent crude finished the session $1.38 lower, or down 1.89%, at $71.57 per barrel. U.S. West Texas Intermediate crude settled 92 cents lower, a decline of 1.32%, ending the day at $68.58 per barrel.
This morning, Brent futures for September declined by 50 cents, or 0.70%, to $71.07 per barrel, and the WTI futures were down 63 cents, or 0.92%, to $67.95 per barrel.
Meanwhile, gold futures plunged 0.70% to $4,053.80 per Troy ounce.
