Asian shares drop after plunge in Big Tech stocks gives Wall St its worst day in months

TOKYO (AP) — Asian shares skidded Monday after worries about Big Tech investments and rising odds for an interest rate hike gave U.S. stocks their worst day since October.

Japan’s benchmark Nikkei 225 dropped 4.2% to 63,804.77. The Japanese government revised the annualized economic growth rate to 1.8% for the first quarter this year, down from an earlier estimate of 2.1%.

Oil prices surged as Israel launched airstrikes early Monday targeting central and western Iran in response to missile fire. Iranian state television reported the sound of explosions being heard in Isfahan, Tabriz and Tehran, without immediately elaborating.

American and Iranian negotiators reached a tentative deal last week to extend their ceasefire, but the agreement has not been finalized and the latest attacks further strain efforts to end the conflict.

Brent crude, the international standard, jumped $3.50 to $96.59 a barrel. Benchmark U.S. crude surged $3.48 to $94.02 a barrel.

In other share trading, South Korea's Kospi slipped 6.8% to 7,605.42 as Samsung Electronics, the country's biggest company, dropped 7%. SK Hynix declined 3.3%.

Taiwan's Taiex lost 3.8%.

Hong Kong's Hang Seng lost 1.3% to 24,631.64. The Shanghai Composite shed 1.1% to 3,984.75.

Trading was closed in Australia for the King’s Birthday, a holiday.

Wall Street finished last week with the S&P 500 sinking 2.6%, to 7,383.74, after a strong jobs report boosted expectations that the Federal Reserve will raise rates at some point this year.

It was the biggest one-day drop since Oct. 10, when the Trump administration threatened to impose a 100% tariff on imported goods from China. The Dow Jones Industrial Average fell 1.4% to 50,866.78. The Nasdaq composite slumped 4.2% to 25,709.43.

Bond yields jumped after a report showed the U.S. added a surprising 172,000 jobs in May, according to the Labor Department. It is the latest report showing that employment remains solid, despite the squeeze inflation is putting on businesses and consumers.

The yield on the 10-year Treasury rose to 4.54% from 4.50% just before the report was released. The yield on the 2-year Treasury, which more closely tracks the Fed’s actions, jumped to 4.16% from 4.04% just prior to the report.

The Fed has been holding interest rates steady as it tries to gauge the ongoing impact from rising inflation. Prices were already ticking higher from the impact of tariffs. The U.S. war with Iran has essentially blocked crude oil shipments from moving through the Strait of Hormuz.

In currency trading early Monday, the U.S. dollar inched up to 160.35 Japanese yen from 160.25 yen. The euro cost $1.1530, up from $1.1515.