Key Highlights

● South Korea's Kospi suffered the steepest fall among Asia's major benchmarks on Thursday.

● China's CSI 300 closed at 4,036.30, more than a fifth below its June 22 peak.

● Lam Research posted record revenue of $8.22 billion despite cautious December-quarter guidance.

● The Japanese yen and Swiss franc were the top gainers among major currencies.

Asia's major stock markets tumbled on Thursday, October 22, giving an early warning of the technology selloff that would hit Wall Street later in the day.

South Korea's Kospi suffered the steepest fall among the region's major benchmarks, followed by Hong Kong's Hang Seng and Japan's Nikkei 225. Reports differed on the size of the Nikkei's decline. China's CSI 300 closed at 4,036.30 and slid into a bear market, sitting more than a fifth below its June 22 peak.

The overnight trigger

The selling followed US earnings released after Wall Street's close on Wednesday. Meta Platforms (NASDAQ:META) said it expects 2026 capital spending of $135 billion to $145 billion. It also reported negative free cash flow of $2.12 billion, its first cash outflow in more than a decade, and spending commitments of about $825 billion.

Lam Research (NASDAQ:LRCX), a major supplier of chipmaking equipment, posted record revenue of $8.22 billion. However, its December-quarter guidance midpoint was slightly below consensus, and it cited supply-chain constraints. The company also said its China sales would be "meaningfully down."

Together, the reports raised questions about how much the AI build-out will cost and how it will be funded. That hit markets where chipmakers and tech hardware suppliers carry heavy weight.

Why Korea and Japan were exposed

South Korea's Kospi has a heavy weighting in semiconductor makers, which may have made it especially sensitive to worries about the chip cycle. Japan is also home to large chip-equipment and component suppliers.

Hong Kong's Hang Seng includes many of China's largest technology platforms, and the CSI 300's slide into a bear market added to the region's gloom.

Wall Street picks up the baton

When US markets opened, the selling continued. The Nasdaq Composite sank 694 points to 26,008.86, its steepest drop since June 5, wiping out about $1 trillion in market value. The S&P 500 fell 93.74 points to 7,663.43, its worst day since July, while the Dow Jones Industrial Average edged up 11.89 points.

The Philadelphia Semiconductor Index had its biggest one-day drop since June 23. Nvidia (NASDAQ:NVDA) was trading at $212.21 and was the biggest drag on the S&P 500. Lam Research plunged to about $230.15. Taiwan Semiconductor (NYSE:TSM) US-listed shares also fell.

Europe followed too, with stocks posting their biggest drop in three weeks.

Currencies and havens

In currency markets, the Japanese yen and Swiss franc were the top gainers among major currencies as investors sought safety. The dollar bought about 156.87 yen.

Oil climbed, which could add to the pressure on energy-importing Asian economies. Brent crude settled at $113.17, its highest since May 4, after Houthi attacks in Saudi Arabia hit Dammam airport and an Aramco oil field. Gold fell to its lowest in more than two months, and bitcoin slid to about $81,200 to $81,300.

Friday's Cues for Asian Traders

Asian markets will take their cue on Friday from US futures, which were roughly flat on Thursday evening. S&P 500 futures were near 7,707, while Nasdaq-100 futures edged lower.

Investors in the region will also watch next week's US tech earnings. Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) report on October 28 and Amazon (NASDAQ:AMZN) and Intel (NASDAQ:INTC) on October 29. Their spending plans will be closely read across Asia's chip supply chain.