Asian bourses extended losses into a second day, with markets in Seoul and Tokyo around 5% below Tuesday’s morning highs. Nasdaq futures were down 0.2% following a 2% drop for the index on Wall Street.

The biggest declines were concentrated in high-flying technology names, including Nvidia, which has surged to become the world’s most valuable company. Analysts say the speed of the selloff, rather than confidence in artificial intelligence (AI), is the key concern.

“The selloff appears to be largely positioning-driven, with recent outperforming names taking the worst of the move,” said Jon Withaar, Senior Portfolio Manager at Pictet Asset Management in Singapore.

There was no single catalyst for the pullback, though an unexpectedly negative market reaction to strong results from AI and data analytics firm Palantir Technologies is seen as a contributing factor. Palantir shares fell nearly 8% on Tuesday and dropped a further 3% in extended trade.

Nvidia shares slid almost 4% on Tuesday, down about 7% from last month’s peak, while suppliers, competitors and other AI-linked companies faced broad selling pressures across Asian markets.

“It’s fairly blanket selling in the risk-leverage part of the market, which to us looks like short-term profit taking,” said Angus McGeoch, Head of Equities Distribution for Asia at Barrenjoey in Hong Kong. He noted that fund managers are mindful of their 2025 results and are stepping back cautiously rather than abandoning positions entirely.

–Reuters–