Asian stocks are expected to track the US selloff after a disappointing outlook from Europe's largest tech firm, ASML Holding NV, and concerns about new US curbs on chip sales weighed heavily on the tech sector, which has driven much of the recent bull market.
Futures for Tokyo, Hong Kong, and Sydney suggested declines, following the S&P 500’s 0.8% drop. The tech-heavy Nasdaq 100 fell 1.4%, driven by a 4.5% decline in Nvidia Corp due to discussions about capping sales of advanced AI chips to certain countries. Meanwhile, ASML plunged 16% after cutting its 2025 guidance.
A survey by Bank of America Corp suggested that investors are increasingly bullish, signaling a potential sell-off in global stocks as allocations to equities surged, while bond exposure and cash levels dropped.
In Asia, traders will be closely monitoring China's stocks after the housing minister announced a press briefing to provide more details about potential property sector support. US-listed Chinese shares saw a 6% slump, while the CSI 300 index dropped more than 3% on Tuesday, raising concerns about Beijing's ability to maintain stimulus efforts.
Despite these concerns, some strategists, such as UBS Group AG, remain optimistic, raising their S&P 500 year-end target to 5,850. However, the outlook for 2025 remains uncertain due to potential fiscal and monetary policy shifts and upcoming election outcomes. Goldman Sachs also expects the S&P 500 to continue rallying, potentially surpassing 6,000 before the year's end.
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