The MSCI Asia Pacific index increased 0.8% after falling 3.6% on Tuesday. South Korea’s chip-heavy Kospi increased over 3% after falling 10% on Tuesday.
US equity futures also edged higher after the Nasdaq 100 plunged 3.3% on Tuesday and the S&P 500 fell 1.4%. A closely watched semiconductor gauge — which had more than doubled from its war-driven lows — lost about 8% in the US.
The volatile backdrop is sharpening the focus on memory chipmaker Micron Technology Inc.’s results Wednesday, which are expected to provide crucial cues on whether demand for AI infrastructure remains strong enough to sustain this year’s rally.
Elsewhere, Brent edged lower to trade below $77 a barrel as tanker traffic through the Strait of Hormuz became more visible following an interim peace agreement between the US and Iran. The Bloomberg Dollar Spot Index steadied after a two-day advance.
Tuesday’s equity selloff came as markets prepare to close out the first half of 2026 with some blockbuster gains driven by easing geopolitical tensions, solid earnings and an AI trade revival. That’s despite growing concern over whether the massive spending commitments by technology firms will generate sufficient returns. Those worries, coupled with elevated valuations and crowded positioning, have triggered sharp pullbacks in the sector from time to time.
Further volatility is expected in memory-chip stocks — an area that has accounted for the lion’s share of equity gains this year — as a local media report signaled SK Hynix is redirecting its efforts toward cheaper products.
Elsewhere in Asia, Indonesian assets will be in focus after MSCI Inc. again delayed its review of the nation’s equities, saying it needs more time to assess whether recently announced transparency reforms are working. MSCI had in January warned of a possible downgrade to frontier status due to investability concerns.
The New York-based index provider also retained South Korea in its emerging-markets indexes.
In fixed income, Treasuries advanced on Tuesday as the equity selloff and falling oil prices were seen as easing pressure on the Federal Reserve to raise interest rates to contain inflation. Yields fell roughly one to three basis points, led by shorter maturities that are most sensitive to changes in Fed policy. The two-year yield dropped around three basis points to about 4.20%.
An auction of two-year Treasury notes drew strong demand about a week after Kevin Warsh’s first press conference as Fed chair spurred a sharp increase in yields as traders priced in more tightening in response to rising inflation. Focus now turns to this week’s personal spending data for more cues.
With inputs from Bloomberg
