Asian stocks pull back Tuesday after record rally

Nikkei 225 dipped at Tuesday’s open after surging to a record 72,353.96 on Monday, while the Kospi quickly rebounded into positive territory after a soft start.home
The selloff followed a sharp drop in the Nasdaq Composite overnight, led by Alphabet ↘5.08% declines, while Samsung Electronics opened down over 1% on profit-taking.mitrade
Bank of America ↗2.08% forecast 75 basis points of Fed rate hikes this year, and falling oil prices added to cautious sentiment across the region.usnews

Asian Markets Open Lower Tuesday as Investors Book Profits After Record Rally

Asian equities retreated in early trading on Tuesday as investors locked in gains following Monday’s record-setting rally, with overnight weakness in U.S. technology stocks and uncertainty over Federal Reserve policy weighing on sentiment.

Tech Pullback Drives Opening Losses

Japan’s Nikkei 225 opened 0.33% lower at 72,112.43 on Tuesday morning, pulling back after surging 1.55% on Monday to a record high of 72,353.96. South Korea’s Kospi slipped 0.34% at the open to 9,083.54 before quickly rebounding into positive territory, reflecting the mixed finish on Wall Street where the Nasdaq Composite fell 1.32% as Alphabet led declines in big tech.mitrade

Monday’s session had been buoyant across the region, with the MSCI Asia Pacific Index rising as much as 1.1% to a record high, led by AI and semiconductor names. SK Hynix had surged 5.6% to an all-time high, but Samsung Electronics opened down more than 1% on Tuesday as profit-taking set in.home

Oil Volatility and Fed Expectations Add Pressure

Oil markets remained volatile as traders assessed the durability of the U.S.-Iran interim peace agreement. Brent crude fell to $77.90 a barrel in Asian trading Tuesday, extending recent declines driven by prospects for restored Iranian supply through the Strait of Hormuz. Prices have dropped sharply from wartime peaks above $120, with Brent losing roughly 36% since April.cnbc

The U.S. dollar held firm, with USD/JPY pressing toward 162.00 and Asian currencies modestly weaker in orderly trading, according to MUFG Research. Rate expectations continued to shift hawkish after Bank of America on Monday forecast three 25-basis-point hikes in September, October, and December — the most aggressive call among major banks. Kalshi traders now assign a 57% probability to a Fed rate hike in 2026, following the June meeting where nine of 19 policymakers signaled rates would need to rise this year.mufgresearch

Outlook Hinges on Data and Diplomacy

Market participants are watching upcoming Asian PMI data for macro direction, while the sustainability of the U.S.-Iran deal remains a key variable for energy markets and broader risk appetite. Analyst Tamas Varga of PVM Oil Associates cautioned that “even if the agreement is upheld, the recent decline in prices may not be sustainable in the short term”.youtube