Asian markets retreat after rebounding AI stocks send the S&P 500 to brink of a new record

BANGKOK (AP) — Asian shares have retreated, with South Korea's Kospi shedding nearly 8% despite a rebound for AI stocks that lifted stocks on Wall Street.

Oil prices rose and U.S. futures were mixed.

In Seoul, the Kospi lost 7.6% to 7,444.13 as shares in both Samsung Electronics and SK Hynix slumped 8.7%.

The sharp drops occurred even after Samsung announced its operating income surged 19-fold to 89.4 trillion won ($58.7 billion) in the last quarter while its revenue more than doubled. AI stocks have been gyrating on fears their prices have shot too high, raising questions about whether all the dollars flowing into AI chips and data centers can possibly create enough gains in productivity and profits to make back all the investments.

“The first proper AI stress test may not have arrived with weak demand, a capex warning, or some sudden crack in the data center story. It may have arrived with Samsung posting an extraordinary quarter and the stock falling anyway,” Stephen Innes of SPI Asset Management said in a commentary.

SK Hynix will further test investors' appetite for AI this week, aiming to raise $28 billion by selling shares of stock that will trade in the United States on the Nasdaq. That would make it one of the biggest U.S. offerings ever, behind SpaceX’s IPO from last month, which raised $75 billion.

The company's stock in Seoul has already more than tripled so far this year because of the AI boom, despite sharp losses in recent weeks.

Tokyo's Nikkei 225 declined 1.8% to 68,493.52. Computer chipmaker Tokyo Electron lost 3.4% and chipmaker Kioxia Holdings shed 10.7%.

The Hang Seng in Hong Kong declined 0.4% to 23,517.70, while the Shanghai Composite index gave up 1% to 3,999.03. Taiwan's Taiex lost 1.8%.

In Australia, the S&P/ASX 200 declined 0.3% and India's Sensex edged 0.1% higher.

On Monday, the S&P 500 rose 0.7% to 7,537.54, pulling to within 1% of its all-time high, even though the majority of stocks within the index fell.

The strength for companies in the artificial-intelligence technology industry sent the Nasdaq composite 1.1% higher, to 26,121.16. The Dow Jones Industrial Average rose 0.3%, to 53,055.91, a record.

Broadcom was one of the strongest forces lifting the S&P 500. It rose 3.7% after announcing long-term agreements to provide silicon products to Apple. It was coming off two straight losses of more than 2% on Wednesday and Thursday at the end of last week, before Friday’s holiday in advance of the Fourth of July.

SpaceX erased an early gain to fall 1% in the last day of trading before it’s scheduled to join the Nasdaq 100 index of the largest non-financial stocks on the Nasdaq. That inclusion will force funds like the QQQ exchange-traded fund, which mimic the index, to buy SpaceX themselves.

Elsewhere in AI, TeraWulf climbed 4.9% after it said Anthropic agreed to a 20-year deal to use its data center in Kentucky. TeraWulf expects the deal to bring in roughly $19 billion in revenue. TeraWulf is in the midst of transitioning its business away from mining bitcoin and into high-performance computing.

In the oil market, the price of a barrel of Brent crude, the international standard, rose 52 cents to $72.51 a barrel. That’s close to where it was before the United States and Israel attacked Iran in late February, sending prices spiking.

The stability of supplies remains uncertain. A tanker traveling off the coast of Oman in the Strait of Hormuz caught on fire early Tuesday morning after being struck by a projectile, the British military said.

The attack was the latest targeting a vessel moving through the narrow mouth of the Persian Gulf, through which a fifth of all oil and natural gas traded once passed in peacetime. Iranian state television said the liquefied natural gas tanker came under attack after ignoring warnings but did not directly claim the assault.

U.S. benchmark crude added 43 cents to $68.98 a barrel.

In currency trading, the U.S. dollar fell to 161.73 Japanese yen from 162.09 yen. The euro slipped to $1.1439 from $1.1442.

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AP Business Writers Stan Choe and Matt Ott contributed to this report.