On Tuesday, the majority of Asia-Pacific markets experienced declines, following the ongoing sell-off in the technology sector, driven by concerns surrounding the AI bubble. Nvidia shares experienced a decline of over 1% on Monday in the U.S., relinquishing a portion of the more than 5% increase observed during the previous week. Palantir Technologies, Meta Platforms, and Oracle experienced declines in their performance. Japan’s Nikkei 225 declined by 0.37%, closing at 50,339.48, while the broader Topix index fell by 0.51%, finishing at 3,408.97. Shares of Softbank Group Corp declined nearly 2% following the company’s announcement late Monday regarding its acquisition of data center investment firm DigitalBridge for $4 billion, a strategic move aligned with its artificial intelligence initiatives.

Masayoshi Son stated that the acquisition “will strengthen the foundation for next-generation AI data centers” and further the company’s ambition to establish itself as a prominent provider of “Artificial Super Intelligence” platforms. DigitalBridge’s shares experienced an increase of approximately 10% following the announcement. South Korea’s Kospi experienced a decrease of 0.15%, concluding at 4,214.17, whereas the small-cap Kosdaq fell by 0.76% to 925.47, marking the most significant losses in the Asian markets. Hong Kong’s Hang Seng index defied the prevailing market sentiment, increasing by 0.86% in the final hour of trading. Meanwhile, the CSI 300 in mainland China experienced a modest gain of 0.26%, concluding at 4,651.28.

Investors are evaluating China’s military maneuvers in the vicinity of Taiwan, following the announcement of new drills by the world’s second-largest economy on Monday. Taiwan’s President Lai Ching-te stated that Taiwan will “act responsibly and not escalate conflict,” while also asserting that the “frequent escalation of military pressure” by China is not indicative of a responsible power’s behavior. The Taiwan Weighted Index declined by 0.36% to close at 28,707.13, as prominent technology firms such as Taiwan Semiconductor Manufacturing Company and Hon Hai experienced decreases of approximately 0.65% and 1.3% respectively. Australia’s S&P/ASX 200 experienced a decline of 0.1%, settling at 8,717.1, following earlier gains observed during the day.

U.S. futures exhibited minimal variation during the early hours of trading in Asia. Overnight in the U.S., the S&P 500 experienced a decline of 0.35%, whereas the Nasdaq Composite recorded a decrease of 0.50%. The Dow Jones Industrial Average experienced a decline of 0.51%. Market participants will be attentive to the forthcoming home price data scheduled for release on Tuesday at 9 am, alongside the Federal Reserve’s minutes from its December meeting, which are set to be published at 2 pm.