Asian Tech Stocks Plummet Amid Rising Bond Yields and AI Trade Concerns

Asian technology stocks plummeted on Monday, with South Korea's KOSPI leading the decline, as investors reassessed their exposure to AI-linked chipmakers. The tech-heavy KOSPI fell 3.1%, while Japan's Nikkei 225 slipped 1.1%. U.S. tech sentiment also remained weak, with Nasdaq 100 futures falling 1.2%.

The selloff comes after U.S. Treasury yields climbed toward 5% and markets priced in an 86% chance of a 25-basis-point Federal Reserve rate hike this week following hotter-than-expected U.S. inflation data. Higher yields tend to weigh disproportionately on richly valued technology companies whose earnings are expected further into the future.

Semiconductor stocks remained at the center of the pullback, with investors growing more cautious toward the AI trade after a period of outsized gains. The sector also faced fresh debate over AI spending after Anthropic CEO Dario Amodei called for slowing development of increasingly powerful AI models on safety grounds.