The MSCI Asia Pacific Index rose nearly 1% in early trading after slumping 3.6% on Tuesday, the most since early March. The chip-heavy Kospi climbed about 4% after tumbling 10% in the previous session. Shares of Samsung Electronics Co. surged 10%, almost erasing Tuesday’s losses, bolstered by a report that it may announce a buyback. US equity futures also rose after the Nasdaq 100 plunged 3.3% and the S&P 500 fell 1.4%.
The volatile backdrop has sharpened the focus on memory chipmaker Micron Technology Inc.’s results Wednesday, which are expected to provide crucial cues on whether demand for AI infrastructure remains strong enough to sustain this year’s rally. Veteran strategist Louis Navellier said the report will be the grand finale to a “stunning” earnings season. Micron’s shares dropped 13% Tuesday but are still up more than 250% in 2026.
“Whether or not we rally in the short-term, we continue to see medium-term downside risk for the tech/AI trade,” said Jonathan Krinsky, chief market technician at BTIG LLC, adding he sees between 10% and 15% additional downside in the semiconductors group.
Elsewhere, Brent edged lower to trade below $77 a barrel as tanker traffic through the Strait of Hormuz became more visible following an interim peace agreement between the US and Iran. The Bloomberg Dollar Spot Index steadied after a two-day advance.
Tuesday’s equity selloff came as markets prepare to close out the first half of 2026 with some blockbuster gains driven by easing geopolitical tensions, solid earnings and an AI trade revival. That’s despite growing concern over whether the massive spending commitments by technology firms will generate sufficient returns. Those worries, coupled with elevated valuations and crowded positioning, have triggered sharp pullbacks in the sector from time to time.For the Kospi, Tuesday’s rout was one of its steepest plunges in history as sentiment suddenly soured on the global AI buildout, sparking a rapid unwind of leveraged positions in the world’s best-performing market.“We don’t know yet that the bubble has burst,” Paul Gambles, co-founder and managing partner at MBMG Group, said on Bloomberg Television, referring to South Korea’s market. “This could just be a minor correction, things could get back on track again. But who knows, this could be the start of the big one.”
Meanwhile, Indonesian assets will be in focus after MSCI Inc. again delayed its review of the nation’s equities, saying it needs more time to assess whether recently announced transparency reforms are working. MSCI had in January warned of a possible downgrade to frontier status due to investability concerns.
The New York-based index provider also retained South Korea in its emerging-markets indexes.
In fixed income, Treasuries advanced on Tuesday as the equity selloff and falling oil prices were seen as easing pressure on the Federal Reserve to raise interest rates to contain inflation. Yields fell roughly one to three basis points, led by shorter maturities that are most sensitive to changes in Fed policy. The two-year yield dropped around three basis points to about 4.20%.
An auction of two-year Treasury notes drew strong demand about a week after Kevin Warsh’s first press conference as Fed chair spurred a sharp increase in yields as traders priced in more tightening in response to rising inflation. Focus now turns to this week’s personal spending data for more cues.
“The market is pretty well priced for a more hawkish Fed outlook at this point,” with inflation-adjusted two-year yields the highest since the Fed began cutting interest rates in September 2024, said Izaac Brook, an interest-rate strategist at RBC Capital Markets.
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