Asian shares mostly declined on Tuesday as global sentiment softened following a pullback in major U.S. indexes from their record highs

BY COMFORT OGBONNA

Asian shares mostly declined on Tuesday as global sentiment softened following a pullback in major U.S. indexes from their record highs. Despite the regional downturn, U.S. stock futures showed slight gains, hinting at cautious optimism ahead of a key week for economic policy decisions.

Tokyo’s Nikkei 225 stood out as the rare gainer in the region, edging up 0.2% to 50,691.39 as Japanese investors continued to show resilience despite global volatility. The modest rise contrasted sharply with declines across other major Asian markets.

Chinese markets weakened as investors awaited signals from the Central Economic Work Conference, the annual high-level gathering where China’s leadership sets economic priorities for the coming year. Hong Kong’s Hang Seng index dropped 0.8% to 24,549.54, while the Shanghai Composite dipped 0.1% to 3,918.83, reflecting caution over potential policy shifts and the country’s broader growth trajectory.

Elsewhere in the region, South Korea’s Kospi fell 0.3% to 4,140.44, pressured by losses in technology and industrial shares. Taiwan’s Taiex index slipped 0.5%, continuing its recent streak of profit-taking. In Australia, the S&P/ASX 200 retreated 0.2% to 8,607.80 after the Reserve Bank kept its cash rate unchanged at 3.6%, a decision widely expected as policymakers monitor inflation trends and household spending.

Technology stocks remained in focus after U.S. President Donald Trump announced that Nvidia would be allowed to export its H200 artificial-intelligence chips to “approved customers” in China. Nvidia’s shares rose 2.3% in after-hours trading and had already advanced 1.7% during Monday’s session. Trump said he had informed China’s President Xi Jinping about the decision and received a “positive” response.

Analysts say the move could reshape the global AI race. Julian Evans-Pritchard of Capital Economics noted that enabling China to buy advanced AI hardware could accelerate the country’s AI infrastructure development and potentially allow Chinese models to compete more closely with the most advanced U.S. systems. The decision marks a major shift in tech-trade policy, especially after years of restrictions aimed at limiting China’s access to high-end chips.

Investors worldwide are now turning their attention to Wednesday’s Federal Reserve meeting, where policymakers are expected to cut interest rates in an effort to counter weakening job numbers and support economic growth. Markets have priced in multiple cuts this year, but uncertainty remains about how aggressively the Fed will ease policy into 2026.

On Wall Street, Monday’s session saw modest declines. The S&P 500 eased 0.3% to 6,846.51, marking just its second loss in nearly two weeks but staying within reach of its all-time high. The Dow Jones Industrial Average fell 0.4% to 47,739.32, while the Nasdaq composite inched down 0.1% to 23,545.90.

Media and entertainment stocks were active after Paramount launched a surprise bid to outmatch Netflix’s agreement to acquire Warner Bros. Paramount offered $30 per share and a faster, simpler payout structure, proposing an all-cash purchase of Warner Bros. Discovery. Netflix’s earlier bid involved cash and stock tied to the company’s split with Discovery. Paramount’s offer has intensified competition and scrutiny, especially after President Trump suggested that a Netflix–Warner Bros. merger “could be a problem” due to concerns over industry concentration.

Following the new proposal, Warner Bros. Discovery shares jumped 4.4%, while Paramount Skydance rallied 9%.

In tech-related corporate news, Confluent surged 29.1% after IBM announced an $11 billion acquisition to enhance its artificial-intelligence capabilities. The deal aims to streamline how companies process and connect data, a key component in deploying advanced AI tools. IBM shares rose 0.4% after the announcement.

Despite recent volatility, the U.S. stock market has regained a sense of calm, driven by expectations of lower interest rates. However, inflation still sits above the Federal Reserve’s 2% target, creating a divide among officials about whether rising prices or weakening employment poses the greater risk.

In commodities trading early Tuesday, U.S. benchmark crude oil slipped 18 cents to $58.70 per barrel, while Brent crude fell 13 cents to $62.36. Currency markets were relatively steady, with the U.S. dollar rising slightly to 155.96 yen and the euro ticking up to $1.1646.