Asian Markets Stumble as Wall Street Retreats Amid Nvidia Slump

Asian shares fell on Friday following a drop on Wall Street, driven by a significant loss in Nvidia stock. Japan's Nikkei 225 remained mostly unchanged amid rising inflation. Mixed economic signals in the U.S. impacted Treasury yields, while energy trading saw slight declines in crude prices.

Asian shares closed mostly lower on Friday after a downturn on Wall Street, where a significant drop in Nvidia stock pulled markets down. Japan's benchmark Nikkei 225 finished nearly unchanged, down less than 0.1% to 38,596.47, after reporting a rise in inflation to 2.5% for May, up from 2.2% in April.

Market analyst Yeap Jun Rong from IG noted, “We will have one more month of data before the next Bank of Japan meeting, which will be closely watched to determine if markets are ahead of themselves in expecting a potential rate hike in September.” Australia's S&P/ASX 200 rose slightly by 0.3% to 7,796.00, but South Korea's Kospi fell by 0.8% to 2,784.26. Hong Kong's Hang Seng dropped significantly by 1.6% to 18,039.40, and the Shanghai Composite slipped 0.2% to 2,998.14.

On Wall Street, Thursday's trading saw the S&P 500 falling by 0.3% from an all-time high after trading resumed post the Juneteenth holiday. Concurrently, the Nasdaq composite pulled back from its record high, slipping 0.8% to 17,721.59, while the Dow Jones Industrial Average outperformed with a 0.8% gain, closing at 39,134.76. Nvidia’s stock reversed an early gain, ending the day with a 3.5% loss, thus threatening an eight-week winning streak. The chip-maker has been at the heart of Wall Street’s AI technology excitement, climbing 164% this year, until Microsoft's recent rebound.

Accenture showcased AI’s potential with its shares rising 7.3% despite weaker-than-expected quarterly profit and revenue, having secured $900 million in new AI bookings. Wall Street’s high interest rates aimed at curbing inflation have pressured housing and manufacturing sectors, adding strain to lower-income households. Despite mixed economic signals and increased Treasury yields, hopes are rising that a slowdown in the U.S. economy could prompt the Fed to consider rate cuts, potentially easing economic pressures and boosting investments.