Asian equities cooled on Thursday following a sharp, AI-fueled advance the prior session, while crude oil traded in a relatively narrow range as markets weighed the prospects of a potential Iran peace arrangement.
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.69%, underpinned by weakness in technology firms. Regional benchmarks recorded notable moves: South Korean equities fell 3.64% and Japan’s Nikkei 225 declined 1.57%.
Individual technology names led the pullback. In Seoul, Samsung Electronics dropped 2.44% and SK Hynix retreated 6.95%. In Tokyo, Kioxia plunged 9.61% and Tokyo Electron slid 4.61%.
The Asian sell-off followed a softer session on Wall Street, where the Nasdaq ended a days-long run of gains after earnings reports from prominent technology-related companies disappointed some investors. Shares of SpaceX and Advanced Micro Devices weakened following their quarterly results. While the AI and satellite company flagged faster-than-expected returns from its AI spending, some investors remained uneasy about how long its profitable Starlink business could sustain the heavy investments in data centres. AMD’s results beat analysts’ estimates but did not meet investors’ elevated expectations.
Reports citing a senior Iranian source and two regional officials said a proposed deal between Iran and Oman to help end five months of conflict between Iran and the United States would grant Tehran control over ships entering the Gulf through the Strait of Hormuz - described in those reports as one of the largest concessions yet to Iran.
Oil prices were largely steady in the roughly $70-per-barrel area. Brent crude futures (LCOc1) eased to $79.31 per barrel, down 0.18%. U.S. West Texas Intermediate futures (CLc1) edged 0.35% lower to $74.96 a barrel.
Madison Cartwright, senior geo-economics analyst at Commonwealth Bank of Australia, commented that a deal to reopen the Strait of Hormuz could be achieved by early September, though he remained sceptical that a deal was imminent. "Iran still has more leverage and will extract additional concessions from the U.S. under any new deal," Cartwright said in a note.
Attention among investors is now turning to U.S. labour market data ahead of Friday’s nonfarm payrolls report. ADP’s private payrolls data on Wednesday showed private employers added 44,000 workers in the latest month, down from 95,000 in June and about 25,000 below expectations.
Economists polled by Reuters expect the government’s July jobs report to show the U.S. economy added 80,000 jobs, following a 57,000 gain in June, with the unemployment rate forecast to remain at 4.2%.
Futures markets priced in roughly a 54% chance of a Federal Reserve rate increase at the September meeting, down from 58% a day earlier, according to the CME Group’s FedWatch tool. The yield on benchmark U.S. 10-year notes fell 1.04 basis points to 4.607%.
In currency markets the dollar was steady against the yen at 157.66 after a rare, coordinated yen-buying intervention by Japan and the United States last week. Officials pledged further action if needed to support the yen. Sony Financial Group senior analyst Juntaro Morimoto said the dollar/yen pair is likely to struggle to find a clear direction, with investors expected to stay largely on the sidelines ahead of the U.S. jobs report.
Precious metals moved higher. Spot gold rose 1.06% to $4,290.26 an ounce, while spot silver gained 0.65% to $62.48 an ounce.
Traders and strategists entering the U.S. jobs release and any further developments in Middle East diplomacy will be watching for signals that could influence oil, sovereign credit risk perceptions, and the broader risk appetite that has driven recent moves in technology shares.