Asia-Pacific stock markets under pressure, South Korean stocks lead the decline, SK Hynix drops 6% at one point, Bitcoin surpasses $80,000, US Treasuries fluctuate at high levels.

South Korea's memory chip giants Samsung Electronics and SK Hynix fell sharply on Monday, dragging the KOSPI index down more than 4% at one point and putting pressure on Asia-Pacific tech stocks overall. Market sentiment turned cautious as investors reduced exposure to tech stocks, waiting for Nvidia's earnings this week to provide key signals for the outlook of AI-related trades.

On August 25th, Samsung Electronics' intraday decline exceeded 4% at one point, while SK Hynix's fall surpassed 6%; together, they contributed the most to the 0.5% drop in the MSCI Asia-Pacific Index, though their declines have since narrowed. Samsung Electronics' stock was under pressure, partly due to its shareholder return plan announced last Friday falling short of market expectations—even though the company said it would return between 90 trillion and 110 trillion won (about $65-80 billion) to shareholders this year, roughly five times the historical record in 2020. Analysts pointed out the scale is still below market estimates and lacks direct measures, such as share cancellation, to boost the stock price.

SK Hynix also faces internal pressures. On Tuesday, union members voted down a temporary wage agreement, with 50.08% of the 15,045 participating employees voting against it. The agreement included a 6.3% raise and revisions to the profit-sharing bonus plan—40% to be paid in cash, 60% in company stock. The union is expected to restart wage negotiations with management.

The drop in Asia-Pacific tech stocks extended Wall Street's losses from the previous trading session. On Monday, US semiconductor giants faced sell-offs, the Nasdaq 100 Index fell nearly 1%, and Nvidia recorded its longest losing streak since 2022. Nvidia is scheduled to release earnings on Wednesday, and the market will closely watch whether its performance can end the recent weakness in chip stocks.

Korean stocks rebounded briefly, Japanese stocks turned positive

The Korean KOSPI index displayed a clear "deep V" shape intraday, plunging 4.3% to 6,408.82 points before rebounding somewhat. At press time, KOSPI stood at 6,531.74, down 2.14%; Samsung Electronics down about 3%, SK Hynix down about 5%.

The Japanese stock market opened lower, with the Nikkei 225 Index falling 0.9%, but rebounded and turned positive in the session. Among individual stocks, Kioxia Holdings fell nearly 3%, Advantest and Panasonic Holdings both dropped more than 3%. On the news side, former Bank of Japan policy board member Seiji Adachi said the central bank is likely to raise rates next month and could do so again as early as January next year. He warned that if the BOJ maintains current policies, it could trigger another yen sell-off, pushing up import costs and accelerating inflation. "The Bank of Japan has basically been cornered, and the market has almost fully priced in rate hikes. If the BOJ does not raise rates, the yen may weaken sharply again."

US Treasury yields remain high; Bitcoin surges above $80,000

US Treasury yields held at high levels, with the 10-year yield at 4.71%. Previously, there were reports the US Treasury might use cash reserves to repurchase old high-yield bonds to lower borrowing costs, but Treasury Secretary Scott Bessent later made no clear signal on debt management changes in his remarks. "We haven’t bought a single bond," Bessent responded in a press conference when asked.

Gold edged lower, spot gold fell 0.2% to about $4,640 per ounce, after reaching its highest level since May. Dollar outlook worries triggered by Fed interventions in the bond market have lent support to gold prices. Bitcoin rose for the third day in a row, breaking through $80,000 for the first time since mid-May. According to Bloomberg strategist Mark Cranfield, the simultaneous strength in gold and cryptocurrencies points to a shared market concern over the long-term prospects for a weakening dollar.

Nvidia earnings and Jackson Hole meeting are dual focal points this week

According to Bloomberg, investors are weighing geopolitical risk against this week's dense schedule of economic data and corporate earnings, with tech stock outlook becoming a crucial variable for gauging overall risk sentiment. Nvidia's earnings are viewed as an important barometer for confidence in AI trades, which have been under sustained pressure recently, as investor doubts grow about whether massive AI spending can convert to commensurate profits.

Chris Larkin of Morgan Stanley's E*Trade said: "Details of US sanctions on Iran, efforts by the Treasury to lower long-term yields, and economic data will largely shape the market sentiment backdrop. However, earnings from Nvidia and other tech stocks will be an important force affecting market momentum."

Richard Reyle, CIO of Questar Capital Partners, pointed out that Nvidia's earnings and Fed Chair Kevin Warsh's speech scheduled for Friday at the Jackson Hole annual meeting form the two pillars of the market this week. "These two things are usually unrelated, but Nvidia needs to deliver standout results to stabilize one leg of the stock market, while Warsh needs to provide clear guidance on rate direction to stabilize the other leg."

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