Asian shares experienced widespread declines on Friday, mirroring the turbulent trading patterns witnessed on Wall Street during the previous session. This market downturn was notably influenced by a significant slump in Microsoft shares, which recorded their most substantial single-day drop in nearly six years.
Regional Market Performance Across Asia
Japan's benchmark Nikkei 225 index fell by 0.5% to settle at 53,119.18 points. This decline was primarily driven by losses in artificial intelligence-related stocks, with testing equipment manufacturer Advantest dropping 5.4% and computer chip equipment maker Disco Corp. declining 2.4%.
Chinese markets also retreated, with Hong Kong's Hang Seng index decreasing by 1.1% to 27,660.80 and the Shanghai Composite index slipping 1.2% to 4,109.36. Taiwan's benchmark index followed this downward trend with a 1.2% loss, while Australia's S&P/ASX 200 declined 0.3% to 8,904.10.
South Korea's Kospi provided a notable exception to the regional pattern, gaining 1% to reach 5,271.81 and extending its recent run of record highs.
Wall Street's Volatile Session and Key Movers
The previous trading day on Wall Street concluded with relatively modest overall movements following dramatic intraday swings. The S&P 500 slipped 0.1% to close at 6,969.01 after fluctuating between flirting with its record high in morning trading and dropping by as much as 1.5% later in the session.
Microsoft emerged as the heaviest weight on the market, tumbling 10% despite reporting stronger-than-expected profit and revenue for the latest quarter. Investors focused instead on the company's substantial investment expenditures, concerns about potential slowing growth in its Azure cloud business, and questions about when its artificial intelligence technology push would translate into significant profits.
Tesla also contributed to market pressure with a 3.5% decline. While the electric vehicle manufacturer delivered better-than-expected quarterly profits, results remained sharply lower than the previous year. Company leadership has been attempting to shift investor focus from declining car sales toward emerging initiatives in robotaxis and robotics.
Notable Gainers Amid Market Pressure
Despite the overall market pressure, more stocks rose than fell within the S&P 500. Meta Platforms led the gainers with a 10.4% rally after surpassing profit expectations, despite continuing substantial investments in artificial intelligence. IBM climbed 5.1% after exceeding analysts' expectations for both profit and revenue.
Southwest Airlines soared 18.7% higher despite falling short of profit forecasts, as the company provided an optimistic 2026 earnings forecast that significantly exceeded analyst expectations. The airline cited strong momentum following operational changes including baggage fees and assigned seating.
Commodity Market Movements and Currency Trading
Oil prices declined by more than $1 per barrel on Friday, with U.S. benchmark crude oil falling to $64.27 and Brent crude decreasing to $68.44. This followed a 3% jump on Thursday driven by concerns about escalating tensions between the United States and Iran, which could potentially constrict global crude oil flows.
Precious metals also weakened, with gold slipping 0.2% to $5,342 per ounce after briefly rallying near $5,600 on Thursday. Silver declined more substantially by 3.5% to $110.41. These movements followed gold's recent milestone of surpassing $5,000 for the first time earlier in the week, with the precious metal having nearly doubled in value over the past twelve months.
Currency markets saw the U.S. dollar trading at 153.71 Japanese yen, up from 152.97 yen, while the euro slipped to $1.1908 from $1.1967.
Broader Market Context and Investor Sentiment
Companies across global markets face increasing pressure to deliver solid profit growth following record-setting runs for stock prices. This dynamic reflects the fundamental relationship between corporate earnings and stock valuations over the long term, with rising earnings needed to address concerns about potentially excessive stock valuations.
The surge in precious metals prices over recent months has been driven by investors seeking safer investments while weighing multiple global risks. These include concerns about expensive U.S. stock market valuations, political instability, potential tariff threats, and substantial government debt loads worldwide.
Similarly, the U.S. dollar has experienced declining value over the past year due to many of the same risk factors that have driven gold prices higher, creating complex interrelationships between different asset classes and global economic concerns.
