Markets in flux as US tech drags, Asian shares decline, and chip restrictions tighten

Global markets have entered a period of heightened volatility, driven by renewed concern over technology stocks, shifting trade policies, and fresh efforts by the US to tighten restrictions on China’s semiconductor industry.

Late-session US stock pressure

In recent trading, the S&P 500 experienced a notable dip in the final minutes of the session, with major technology shares feeling the pressure. A widely watched chipmaker is expected to report earnings soon, and many investors are on alert for any signs that the artificial-intelligence boom, one of the key drivers of this year’s market rally, could be slowing. Some large tech names slipped in anticipation of the earnings release, reflecting a more cautious stance among market participants.

The overall US market picture remains mixed, with the Dow Jones Industrial Average trading relatively flat in contrast to losses in the tech-heavy Nasdaq. Meanwhile, volatility expectations have been on the rise as traders prepare for any potential surprises that could emerge from key tech earnings or new policy announcements.

Asian stocks drop on policy moves

Across the Pacific, Asian markets followed suit with a downturn after the US indicated plans for additional trade and investment measures aimed at Chinese technology and strategic industries. Key equity indexes in Hong Kong and mainland China saw selling pressure amid concerns that fresh US curbs on Chinese tech investments could weigh heavily on sentiment.

Despite these headwinds, some investors in the region sought opportunities to “buy the dip,” particularly in Hong Kong-listed technology stocks. However, uncertainties around ongoing policy shifts, both in the US and China, left markets skittish. Several upcoming events, including potential policy announcements and economic data releases, are likely to guide sentiment in the coming weeks.

Heightened restrictions on semiconductor exports
In a related development, the US administration has been exploring stricter versions of existing chip controls, aiming to prevent China from advancing its semiconductor manufacturing capabilities. This push involves discussions with key allies to align and tighten rules for global chip-gear makers, including limits on servicing or upgrading high-end equipment within China.

The US has already restricted domestic firms from supplying advanced chipmaking tools without licenses, and the government appears keen to persuade partners in Europe and Asia to adopt similar measures. Potential plans may also include curbing specialized chips designed for the Chinese market, even if they fall just below current threshold requirements.

Corporate highlights and upcoming catalysts
In the corporate arena, several well-known names have signaled strategic shifts or faced market pressures. One major technology giant is reportedly scaling up domestic production of certain hardware to mitigate tariff concerns, while a global coffee chain has announced job cuts designed to boost efficiency. In addition, there is renewed speculation around potential mergers and acquisitions that could reshape parts of the asset management and defense sectors.

Looking ahead, a number of economic reports and central bank remarks are on the calendar, including US consumer confidence data, housing figures, and updates on GDP and inflation. In Asia, forthcoming industrial production numbers and inflation data from key markets will also command attention. These releases, together with any changes in policy toward China or the technology industry, could set the tone for global markets as investors gauge whether the recent volatility is a short-term blip or the start of a broader trend.

DXY holding above 106.40 support

The US Dollar Index experienced a decline at the beginning of yesterday’s trading, reaching a low of 106.15—the lowest level since early December of last year. However, the index rebounded during the US session and closed the day around 106.060. Currently, 106.40 acts as a solid resistance level, which could lead to another upward move towards 107.0. Nevertheless, the time/price analysis suggests that the downward trend may not be over yet, with a target of 105.60 anticipated in the coming weeks.

EURUSD stuck below 1.0500

The EURUSD currency pair has struggled to break above the 1.0500 level since the end of January, facing persistent resistance. Despite this, technical indicators across most timeframes remain bullish. Furthermore, the time/price method continues to suggest potential gains towards 1.0600, but a sustained break above 1.0500 is necessary for that to occur. In the coming days, fundamental data from the US, expected later this week, is likely to serve as a catalyst for movement in the currency pair.

Gold near $3000

Gold continues to reach new record highs, climbing as high as $2,953.82 in Asia. However, the recent upward movement since December has become overextended, especially considering that gold has not shown any signs of a downside retracement. Regardless of whether this surge is driven by inflation expectations or geopolitical risks, a downward correction could be expected soon. It’s unlikely that the $3,000 mark will be breached easily.

Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.

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