Asian bourses on decline as US interest rate cut joy wanes; tech cautious ahead of Nvidia

Investing.com — Most Asian stocks fell on Tuesday. Investors have been wary of tech stocks ahead of key financial results that Nvidia will announce, as the rally lost its impact on US interest rate cut optimism.

Chinese stocks were stagnant after rising to multi-year highs on Monday. Japanese stocks were trading below record levels. Losses in commodity stocks also negatively impacted Australian markets.

Asian markets followed the decline in Wall Street futures as U.S. President Donald Trump's sudden ouster of Federal Reserve Governor Lisa Cook raised concerns about the Fed's independence. S&P 500 Futures fell 0.1% in the Asian session, having earlier slid as much as 0.4%.

Overnight losses on Wall Street were also reflected in Asia. The cautious approach to interest rates and Nvidia's earnings put pressure on risky assets.

Chinese stocks retreat from multi-year highs

China's Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 0.4 percent and 0.3 percent, respectively. The CSI 300 fell from a three-year peak, while the Shanghai Composite dropped from a nearly decade-long high.

Hong Kong's Hang Seng index fell 0.2 percent from a nearly four-year high.

Chinese markets rose sharply throughout August as expectations grew that Beijing would provide more economic support. Measures aimed specifically at increasing consumption and supporting local industries stood out.

Chinese tech stocks were an important part of this rally. Chipmakers were positively influenced by Beijing's promotion of domestic chips while reviewing Nvidia's products.

HSBC analysts said in their latest report that they expect Chinese stocks to continue to perform this year and raised their year-end targets for Chinese exchanges.

Japan and South Korea shares slide as tech sector declines ahead of Nvidia

Markets in Japan and South Korea suffered the biggest losses among their Asian counterparts on Tuesday. The Nikkei 225 and TOPIX indexes fell by about 1%, while the KOSPI declined by a similar rate.

Both regions were hit by losses in technology shares. Investors realized some gains in the sector ahead of NVIDIA Corporation (NASDAQ:NVDA) financial results, which will be released on Wednesday.

Japanese Nvidia supplier Advantest Corp. (TYO:6857) and Nvidia investor SoftBank Group Corp. (TYO:9984) fell about 1% and 2.5%, respectively. In South Korea, memory chip suppliers SK Hynix Inc (KS:000660) and Samsung Electronics Co Ltd (KS:005930) fell 0.4 to 2 percent.

Taiwan's TSMC (TW:2330), a major Nvidia supplier, was flat in trading in Taipei.

Nvidia's earnings come amid some growing doubts about artificial intelligence's long-term prospects. Those doubts had negatively impacted tech stocks last week. Nvidia is considered an important indicator for the demand for artificial intelligence and technology. Any sign of weakness in earnings could lead to more losses in the tech sector.

Nvidia is also expected to address potential sales challenges in China. In particular, Beijing's review of the China-specific H20 chip stands out in this regard.

Broader Asian markets fell on Tuesday. Australia's ASX 200 index fell 0.3 percent, with losses in mining stocks after iron ore giant Fortescue Metals Group Ltd's (ASX:FMG) annual earnings were weak. The company's shares fell 1.6 percent, while its larger rivals BHP Group Ltd (ASX:BHP) and Rio Tinto Ltd (ASX:RIO) fell about 0.5 percent.

Losses at mining companies largely offset a rally of over 8% after supermarket operator Coles Group Ltd (ASX:COL) announced it would make a positive start to its 2026 fiscal year. This helped investors ignore average earnings for the 2025 fiscal year. Coles' rival Woolworths Ltd (ASX:WOW) rose 2.4% and will announce its annual earnings on Wednesday.

Singapore's Straits Times index fell 0.2 percent. India's Nifty 50 index futures, on the other hand, pointed to a horizontal opening. Indian stocks are expected to face some challenges this week due to the August 27-28 deadline Trump has set for a 50% tariff on New Delhi.

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