Asian equity markets slid on Thursday, August 6, 2026, as a sharp selloff in semiconductor shares hit South Korea and Japan. The downturn followed a Nasdaq winning streak snap and disappointing AI-related earnings from U.S. firms, while oil prices remained stable amid reports of a potential U.S.-Iran agreement over the Strait of Hormuz.
The regional mood shifted abruptly after a previous AI-fuelled rally. Investors, suddenly cautious about AI spending and semiconductor valuations, began taking profits. The impact was most severe in Seoul, where South Korean shares extended losses to 4.16 per cent, leading the decline for the MSCI Asia-Pacific index outside Japan, which fell 1.39 per cent.
Samsung and SK Hynix Lead Semiconductor Rout
The technology sector bore the brunt of the volatility. In Seoul, Samsung Electronics fell 6 per cent, while its peer SK Hynix plunged nearly 10 per cent. This rout was triggered in part by sharp overnight declines in U.S. memory-chip makers Western Digital and Sandisk following their earnings reports.
Tokyo felt similar pressure. Kioxia lost 8.2 per cent and Tokyo Electron slumped 5.18 per cent. Despite these losses, Japan’s Nikkei remained more resilient than the Kospi, closing down 0.94 per cent after recovering from an earlier drop of as much as 2.05 per cent.
The instability reflects a broader struggle to price AI expectations. On Wall Street, SpaceX and Advanced Micro Devices (AMD) stumbled after their quarterly earnings. While AMD beat analysts’ estimates, the results failed to meet the lofty expectations
of investors. Similarly, despite reporting faster-than-expected returns on AI spending, SpaceX left investors concerned about the sustainability of using its Starlink business to fund expensive data center investments.
Strait of Hormuz Negotiations and Oil Stability
While equities tumbled, energy markets traded in a tight range. Brent crude futures fell 0.55 per cent to $79.01 per barrel, and U.S. West Texas Intermediate futures edged 0.65 per cent down to $74.73 a barrel. The stability stems from reports that Washington and Tehran are nearing an interim agreement to reopen the Strait of Hormuz.
The proposed deal, involving Oman, would reportedly grant Iran control over ships entering the Gulf through the Strait of Hormuz. Regional officials described this as one of the most significant concessions to date. However, some analysts remain cautious about the timeline.
Iran still has more leverage and will extract additional concessions from the U.S.
Madison Cartwright, senior geo-economics analyst at Commonwealth Bank of Australia
Cartwright noted that while a deal could be reached by early September, he remained sceptical that an agreement is imminent.
U.S. Labour Data and Federal Reserve Expectations
Market participants are now pivoting toward U.S. labour market data. ADP figures released Wednesday showed private employers added only 44,000 workers in July, a significant slowdown from the 95,000 added in June and roughly 25,000 below expectations.
This cooling labour market is influencing interest rate bets. According to the CME FedWatch tool, futures markets price in a 54 per cent chance of a September rate hike, down from 58 per cent the previous day. Economists expect the official government report to show 80,000 jobs added in July, with the unemployment rate holding steady at 4.2 per cent.
Within the Federal Reserve, San Francisco President Mary Daly expressed her support for the previous week’s decision to maintain steady interest rates, though she is not currently a voting member of the Federal Open Market Committee.
Currency Interventions and Safe Havens
Other regional markets showed varying degrees of resilience. Chinese markets were comparatively stable, with the Shanghai Composite slipping only 0.1 per cent. However, Hong Kong’s Hang Seng fell nearly 2 per cent, driven by a slump in insurers following reports that Chinese authorities are enforcing taxes on offshore insurance investment income.
The immediate focus for investors now rests on two major catalysts: the earnings report from SoftBank Group Corp. and the upcoming U.S. nonfarm payrolls report, which will serve as a critical test for both interest-rate expectations and the fragile sentiment surrounding technology stocks.
