Asia technology stocks fell Monday as doubt over the durability of the AI-driven rally weighed on the sector, even as investors braced for key monetary-policy decisions later this week from the Federal Reserve and the Bank of Japan.
The MSCI Asia Pacific index dropped about 0.5%. South Korea's benchmark KOSPI shed 3.1%, while Japan's Nikkei 225 slipped 1.1%. Across the Pacific, Nasdaq 100 futures fell 1.2% and S&P 500 futures fell 0.4%, reflecting similar unease on Wall Street.
At the company level, memory-chip makers bore the sharpest losses. SK Hynix dropped 4.3%, Samsung Electronics fell 2.5%, LG Innotek declined 3.1%, and Kioxia slumped 7.1%. In Japan, Murata Manufacturing fell 3.6% while TDK slipped 0.1%. Sony was among the rare bright spots, rising 3.1%.
The stock selloff coincided with a rise in U.S. Treasury yields, which climbed toward the 5% threshold, and a shift in rate expectations. Following hotter-than-expected U.S. inflation data, markets priced in an 86% chance of a 25-basis-point rate hike by the Federal Reserve at its meeting on Wednesday.
Compounding macro pressures, oil prices surged above $100 a barrel, adding to cost-headline risks just days before the Fed convenes.
Beyond conventional macro Headwinds, Unease also crept into the artificial-intelligence theme itself, which had been a major engine of equity gains throughout 2026. Anthropic chief executive Dario Amodei called for slowing the development of increasingly powerful AI models on safety grounds, a proposal backed by OpenAI chief executive Sam Altman and echoed by xAI chief Elon Musk, who said, "Dario is right." U.S. President Donald Trump downplayed the concerns, saying companies continue to compete aggressively, particularly against Chinese rivals.
Analysts tracking the theme pointed to past winners such as Super Micro Computer, which surged 185% in earlier runs, and AppLovin, up 157%, as evidence that the AI sector has still produced large movers, even as short-term sentiment has cooled.
The Bank of Japan is expected to announce its own policy decision on Friday, adding another layer of uncertainty for regional markets in the coming days.
