Asian Tech Stocks Fall Amid Fears About Potential Fed Rate Increases

By Sherry Qin

Asian technology stocks fell broadly Monday as fears of rising U.S. interest rates added to continued worries about artificial-intelligence spending and lofty valuations.

Samsung Electronics shed 6.2% and memory chip maker SK Hynix declined 2.3%. South Korea's benchmark index Kospi fell as much as 8.4% on early Monday, prompting the market operator to temporarily halt trading.

TSMC, the world's largest contract chip maker, decreased 2.5%. Foxconn Technology dropped 5.4% and MediaTek gave up 5.4%. In Japan, Tokyo Electron dropped 6.7% and Kioxia Holdings was down 8.7%.

Semiconductor-related stocks led declines after the tech-heavy Nasdaq fell 4.2% on Friday. The nine trillion-dollar tech companies in the S&P 500 averaged a loss of 5.3% Friday, totaling about $1.1 trillion in lost market value.

Markets were weighed by a few simultaneous catalysts, including questions about sustainability of artificial-intelligence funding and prospects of higher U.S. interest rates, Saxo Markets chief investment strategist Charu Chanana said.

Stronger-than-expected U.S. jobs data for May have spooked investors as a healthier labor market could lead the Federal Reserve to raise interest rates. CIMB Research said the better-than-expected print boosted expectations for a 25-basis-point rate increase in December.

ING economist James Smith said in a note that the circularity of AI-related spending has attracted market scrutiny, meaning that the same handful of companies are raising money, buying chips, leasing computing capacity and booking revenues off one another.

Still, ING said the fundamentals for the semiconductor sector continued to look strong as investment in AI data centers continue.

Investors are looking for proof that AI demand is broadening beyond the select chip winners, analysts said.

Saxo's Chanana said that market attention has shifted to which companies can actually make money from AI, protect margins and fund the next leg of spending without putting pressure on their balance sheets or shareholders.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

June 08, 2026 00:32 ET (04:32 GMT)