Shares fall in Asia, with Kospi down 5.2%, while oil prices jump

BANGKOK (AP) — Shares slipped Wednesday in Asia after Wall Street pulled further from its all-time high as artificial-intelligence stocks resumed their decline.

South Korea’s Kospi led the regional retreat, dropping 5.2% to 6,515.97. The two biggest companies benefiting from the AI boom tracked losses for their U.S. rivals. Samsung Electronics shed 6.9%, while memory chipmaker SK Hynix tumbled 7.9%.

In Tokyo, the Nikkei 225 sank 2.6% to 65,703.78. The Hang Seng in Hong Kong lost 0.4% to 25,382.66, while the Shanghai Composite index shed 1.5% to 3,927.70. Taiwan’s Taiex fell 1.4%, and Australia’s S&P/ASX 200 slipped 0.4% to 9,083.70.

Apart from renewed jitters over criticism that AI-related stocks have shot too high, rising oil prices also were clouding market sentiment.

Crude prices have been swinging sharply due to uncertainty about when and whether the United States and Iran can reach a deal to allow oil tankers to exit the Persian Gulf freely again. Brent was going for $72.87 per barrel just before the start of the war.

Brent crude, the international standard, surged 0.9% to $91.83 per barrel. U.S. benchmark crude oil gained 1% to $84.88 per barrel

On Tuesday, Wall Street pulled further from its all-time high. The S&P 500 fell 0.7% for a third straight modest loss. The Dow Jones Industrial Average dipped 0.2%, and the Nasdaq composite sank 1.3%.

Stocks that have been big winners in the boom around AI technology led the decline. They’ve been veering up and down this summer on worries that their prices have shot too high and that the strong demand for memory, processors and other building blocks of data centers may fizzle if AI proves less profitable than promised.

Micron Technology dropped 7%, and the seller of computer memory was one of the heaviest weights on the S&P 500. So were chip companies Nvidia, which fell 2.3%, and Broadcom, which sank 3.2%.

Even with their recent swings, such stocks remain big winners, and Micron has more than tripled this year.

Bond yields have been another concern. They have jumped since the war began because high oil prices are pushing inflation higher. That adds to worries over huge debt loads for governments, while surging borrowing keeps yields high.

The yield on the 10-year U.S. Treasury edged down to 4.70% from 4.72% late Monday but remains well above its 3.97% level from just before the war with Iran began. The 30-year Treasury yield also ticked lower but is still near its highest level since 2007.

When bond yields are high, investors are less willing to pay high prices for stocks and other kinds of investments, particularly those seen as the most expensive.

High yields have already sent the average long-term U.S. mortgage rate near its highest level in a year, which has hurt the housing industry. A report on Tuesday said homebuilders broke ground on fewer new houses last month than economists expected.

High yields could also slow borrowing by Big Tech companies to pay for data centers, threatening a big source of growth for the U.S. economy.

In other dealings early Wednesday, the U.S. dollar fell to 159.37 Japanese yen from 159.59 yen. The euro rose to $1.1582 from $1.1574.

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AP Business Writer Stan Choe contributed to this report.