Signs of easing in the "AI panic trade" emerged on Tuesday, with Asian equities and US stock futures advancing as investor risk appetite improved. Shares of Asian chipmakers, including Samsung Electronics, SK Hynix, and Taiwan Semiconductor Manufacturing, surged to record highs. Traders view these firms as essential tools for the AI supply chain, while US software, insurance, and professional services stocks remained under pressure.
Asian markets posted modest gains, reversing earlier weakness from the US session. S&P 500 futures rose 0.3%. South Korea's stock index jumped 2%, helping the MSCI Asia Pacific Index erase its morning losses to close 0.1% higher. European markets were also poised for a positive open.
As risk sentiment improved, gold and silver retreated after four consecutive days of gains. US Treasury yields gave back their advances from the US trading session. Bitcoin registered its worst monthly performance since the cryptocurrency crash of June 2022, falling to around $63,000. The US Dollar Spot Index edged up 0.1%.
This market divergence highlights the contrasting fortunes of Asian and US tech stocks. The MSCI Asia Pacific Index has climbed 12% so far in 2026, while the S&P 500 is virtually flat, marking the Asian index's strongest start to a year relative to its US benchmark. Investors are betting that Asian chipmakers will benefit from AI infrastructure build-out, while US enterprise services, software, and financial intermediaries face disruption risks from the technology.
South Korea's stock index rose 2%, and Japan's Nikkei 225 expanded its intraday gain to 1%. S&P 500 futures increased by 0.3%. The US Dollar Spot Index was up 0.1%. The yen fell 0.4% to 155.27 per dollar. The yield on the 10-year US Treasury note rose 1 basis point to 4.04%. Spot gold fell 0.8% to $5,189.99 per ounce, ending a four-day rally after a 2.5% gain the previous day. Copper prices advanced 2.3% to around $13,200 per ton, and aluminum prices also rose. Oil prices hovered near seven-month highs. Brent crude futures gained 0.8% to $72.08 per barrel, while US crude futures rose 0.9% to $66.88 per barrel. Bitcoin fell as much as 2.64% intraday to $62,858. Its cumulative decline for February exceeded 19%, positioning it for its worst monthly performance since June 2022.
A trend of decoupling between Asian and US markets is becoming apparent. Christopher Forbes, Head of Asia Business at CMC Markets, stated, "The AI panic trade sweeping US markets is a substitution story. Generative AI is repricing the revenue models of enterprise software, professional services, and wealth management platforms. Asian equity indices have little exposure to this. The decoupling has begun."
Carmen Lee, Head of Equity Research at OCBC Bank, suggested this trend could persist for some time. Mohit Mirpuri, Senior Partner at SGMC Capital, noted, "In the first two months of the year, we've seen more targeted allocations to Asia and emerging markets. This doesn't necessarily signal a structural decoupling, but it does indicate global portfolios are broadening exposure beyond the narrow US tech concentration trade."
The robust performance in Asia contrasts sharply with the US. US technology, delivery, and payment stocks declined on Monday after a report from Citrini Research outlined potential AI risks across various sectors. Ongoing uncertainty surrounding former President Trump's tariff policies added to the market weakness.
Bloomberg strategist Mark Cranfield observed that Asian investors continue to believe companies providing the essential tools for the AI race will be rewarded, with the Bloomberg Semiconductor Index significantly outperforming. The momentum among the region's leading firms is so strong that even a very poor earnings call from Nvidia this week would struggle to dampen the rally.
Chip manufacturers are seen as core beneficiaries of AI infrastructure development. Investors believe demand for advanced chips will continue to grow regardless of how AI reshapes business models, providing a solid earnings outlook for firms like Taiwan Semiconductor Manufacturing, Samsung, and SK Hynix.
Concerns about AI disruption are impacting US intermediary businesses. Alap Shah, co-author of the Citrini Research report, stated in a Bloomberg Television interview that chipmakers, data centers, and foundational model labs are key AI trade beneficiaries. Intermediary businesses like insurers and banks face the risks. Shah mentioned his firm has shorted some companies cited in the report while holding a "significant" position in semiconductor stocks expected to benefit.
"Typically, we short a basket of companies we believe will be disrupted by AI," he said during Asian trading hours on Tuesday. "On the other side, we hold a significant amount of semiconductor stocks we think will benefit."
This so-called AI panic trade has become a dominant market theme, with selling pressure spreading from software to US insurance brokers, private credit firms, cybersecurity companies, and even real estate services stocks. International Business Machines plunged on Monday, recording its largest drop in 25 years. An ETF tracking software stocks is heading for its worst monthly performance since 2008.
Commodity and currency markets showed a divided picture. Spot gold declined 0.8% to $5,170.99 per ounce, halting a four-day winning streak after a 2.5% gain the previous day. Ilya Spivak, Global Head of Macro at tastylive, attributed gold's drop to a stronger US dollar and investor profit-taking. Copper prices on the London Metal Exchange rose 2.3% to around $13,200 per ton, with aluminum also advancing.
Oil prices held near seven-month highs. Brent crude futures increased 0.8% to $72.08 per barrel, and US crude futures gained 0.9% to $66.88 per barrel. Priyanka Sachdeva, Senior Market Analyst at Phillip Nova, commented, "Geopolitics is clearly the main driver for oil prices right now. The current strength is primarily driven by expectations rather than actual supply losses."
Federal Reserve Governor Christopher Waller indicated that if upcoming February employment data shows the labor market is "moving to firmer footing" after a weak 2025, he would be willing to hold rates steady at the March meeting.
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