Asian Stocks End Lower on AI Sector Concerns
Asian stocks closed broadly lower on June 4, 2025, as Broadcom's weak outlook fueled concerns about AI stocks, while stronger-than-expected US economic data raised expectations of Fed rate hikes. Bridgewater's Ray Dalio warned the AI rally could be a bubble.
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- 📰 Published: June 4, 2026 at 18:50
- 🔍 Collected: June 4, 2026 at 18:56 (6 min after Published)
- 🤖 AI Analyzed: June 6, 2026 at 15:37 (44h 40m after Collected)
HONG KONG (CNA) Asian stocks ended broadly lower on Wednesday, as a disappointing forecast from chipmaker Broadcom reignited concerns about the artificial intelligence sector and stronger-than-expected US economic data fueled expectations of further interest rate hikes by the Federal Reserve.
According to AFP, renewed clashes between the US and Iran, along with limited progress in peace efforts between Washington and Tehran, further dampened market sentiment. However, oil prices tumbled after reports of a ceasefire agreement between Israel and Lebanon.
Broadcom's quarterly results, released after the US market close on Tuesday, beat expectations, but its current-quarter chip business outlook fell short of forecasts, dragging down technology stocks. The outlook renewed investor worries about overinvestment in AI and potentially excessive valuations.
Ray Dalio, founder of US hedge fund Bridgewater Associates, warned on Tuesday that the frenzy driving AI chip giant NVIDIA's market value above $5 trillion could form a bubble and burst. "All major technological changes create bubbles," he said.
Wall Street faced profit-taking, pausing its recent rally, and Asian markets mostly followed the US downturn. Markets in Tokyo, Hong Kong, Shanghai, Taipei, Seoul, Sydney, Wellington, and Manila all closed lower.
The ADP employment report, often called the "small non-farm payrolls," showed that US companies added the most jobs in early 2025 in May, indicating resilience in the US labor market despite rising energy prices due to Middle East conflicts.
The US is set to release its official non-farm payrolls report on Thursday. Market speculation suggests that if the report shows a strong economy, combined with war-driven inflation, it could increase pressure on the Fed to raise interest rates.
According to AFP, renewed clashes between the US and Iran, along with limited progress in peace efforts between Washington and Tehran, further dampened market sentiment. However, oil prices tumbled after reports of a ceasefire agreement between Israel and Lebanon.
Broadcom's quarterly results, released after the US market close on Tuesday, beat expectations, but its current-quarter chip business outlook fell short of forecasts, dragging down technology stocks. The outlook renewed investor worries about overinvestment in AI and potentially excessive valuations.
Ray Dalio, founder of US hedge fund Bridgewater Associates, warned on Tuesday that the frenzy driving AI chip giant NVIDIA's market value above $5 trillion could form a bubble and burst. "All major technological changes create bubbles," he said.
Wall Street faced profit-taking, pausing its recent rally, and Asian markets mostly followed the US downturn. Markets in Tokyo, Hong Kong, Shanghai, Taipei, Seoul, Sydney, Wellington, and Manila all closed lower.
The ADP employment report, often called the "small non-farm payrolls," showed that US companies added the most jobs in early 2025 in May, indicating resilience in the US labor market despite rising energy prices due to Middle East conflicts.
The US is set to release its official non-farm payrolls report on Thursday. Market speculation suggests that if the report shows a strong economy, combined with war-driven inflation, it could increase pressure on the Fed to raise interest rates.