Asian Markets Tumble as Micron’s Guidance Casts Shadow on Tech Sector

A wave of selling swept across Asian markets on Thursday, driven by a disappointing outlook from chipmaking giant Micron and renewed concerns about China’s economic health. The ripple effects were felt in tech-heavy sectors and beyond, with investors seeking refuge amid growing uncertainty.

Micron’s Guidance Sparks Tech Rout

Micron Technology Inc., a bellwether for the semiconductor industry, reported better-than-expected quarterly earnings, but its forecast for the current quarter fell short of Wall Street’s hopes. This fueled doubts about the sustainability of the AI-driven surge in demand and prompted investors to take profits off the table in the once-booming tech sector.

The Nasdaq Golden Dragon China Index, which tracks U.S.-listed Chinese companies, slid nearly 3%, extending its recent losses as U.S.-China tensions escalate over trade and technology.

Adding to the gloom, data released on Thursday revealed a further slowdown in China’s industrial profit growth in May, raising concerns about the pace of economic recovery in the world’s second-largest economy. The news comes as Beijing prepares for its Third Plenum meeting in July, where policymakers are expected to unveil additional stimulus measures to bolster growth.

However, the specter of a potential trade war with the West continued to weigh on investor sentiment. The European Union recently joined the United States in imposing import duties on Chinese electric vehicles, signaling a united front against what they perceive as unfair trade practices.

Key Regional Markets Follow Suit

Japan’s Nikkei 225 and South Korea’s KOSPI were among the hardest hit, with declines of 1.2% and 0.5%, respectively. Hong Kong’s Hang Seng index suffered a steeper loss of 1.7%, reflecting a combination of tech sector weakness and China-related concerns.

Australia’s ASX 200 slid 1%, extending its losses from the previous session after a hotter-than-expected inflation report fueled speculation of an interest rate hike by the Reserve Bank.

Global Impact and Outlook

The negative sentiment extended to U.S. stock futures, with contracts for the major indexes pointing to a lower open on Thursday. The upcoming release of key U.S. economic data, including the PCE price index, and the first Presidential debate added to the market’s jitters.

Investors are now closely watching for further developments in the U.S.-China trade dispute and signs of additional stimulus measures from Beijing. The upcoming Third Plenum meeting will be a crucial event for gauging China’s economic trajectory and its potential impact on global markets.