Asia Market Alert: AI Anxiety and Tariff Shifts Asian equity markets are facing downward pressure as of February 24, 2026. This retreat follows a turbulent session on Wall Street where renewed fears regarding artificial intelligence disruption and shifting US trade policies dampened investor appetite. The AI "Scare Trade" A significant sell-off in the technology sector has been triggered by fresh concerns over how AI will impact corporate bottom lines. While 2026 began with high expectations for AI-driven growth, the narrative is shifting toward the risks of industry displacement. * **IBM** shares plummeted **13%** in their worst single-day performance since 2000 after new AI tools demonstrated the ability to modernize legacy programming languages. * The **S&P 500** slid **1%**, while software-focused ETFs dropped nearly **4.8%**. * Investors are increasingly skeptical of "momentum-driven" tech sectors, questioning when massive AI investments will yield tangible returns. Tariff Turmoil and Regional Impact Uncertainty regarding US trade policy remains a primary headwind. Following a Supreme Court ruling that limited previous trade authorities, the White House announced a new, across-the-board **15%** tariff on imports. * **Japan’s Nikkei 225** and **South Korea’s KOSPI** both edged lower as they reopened following recent holidays. * **Hong Kong’s Hang Seng** futures fell **0.7%**, reflecting caution as mainland Chinese markets prepare to return from the Lunar New Year break. * In contrast, **Australia’s S&P/ASX 200** managed a slight **0.3%** gain, largely because its index is less exposed to the volatile technology and software sectors. Market Indicators and Safe Havens The shift in sentiment has prompted a rotation into traditional defensive assets. Gold and government bonds are seeing increased inflows as traders pare back risk. * **Gold** surged more than **2%**, trading near **$5,230** per ounce. * **Bitcoin** tumbled below the **$65,000** mark, caught in a broader retreat from speculative assets. * The **US 10-year Treasury yield** fell to **4.03%**, as investors sought the safety of sovereign debt. Divergent Performance Despite the current dip, Asian markets have shown notable resilience earlier in the year compared to US peers. The **KOSPI** has gained over **40%** year-to-date, far outperforming the **Nasdaq Composite**, which has struggled with a **1.5%** decline in the same period. While the long-term outlook for Asian semiconductors remains constructive due to reasonable valuations—trading at a forward P/E of **16.3x** versus **25x** for the Nasdaq—the immediate term is defined by high volatility. Traders are now closely watching upcoming US inflation data and corporate earnings for signs that the AI-driven rally can be sustained.