Asia stocks weak after Wall Street declines, oil falls

Oil fell for the first time in six days after President Donald Trump signaled he may hold off on attacking Iran for now

• Tech stocks fell, pulling down Wall Street and Japan's Nikkei.
• Oil, gold, and silver prices fell after Trump signaled restraint on Iran.
• US retail sales rose in November, boosted by auto purchases and holiday shopping

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Stocks started Thursday on a softer note after Wall Street gauges retreated as investors rotated out of richly valued technology stocks.

Japan’s Nikkei 225 index fell 1%, while US equity-index futures dropped 0.1% and contracts indicated weaker opens for Hong Kong and mainland China. Conversely, gauges edged higher in South Korea and Australia. That was after the tech-heavy Nasdaq 100 Index dropped 1.1% on Wednesday and the S&P 500 closed 0.5% lower due to losses in tech megacaps.

Oil fell for the first time in six days after President Donald Trump signaled he may hold off on attacking Iran for now. West Texas Intermediate fell 1.7% Thursday. Gold and silver dipped after surging to records in the previous session.

Asian shares have outpaced gains on Wall Street this year on relatively cheaper valuations and optimism over the artificial-intelligence trade. In contrast, the first weeks of the year in the US have been marked by a rotation out of giant tech companies, whose all-weather earnings made them safe bets at times of economic uncertainty.

“This is a demonstration of what occurs when rotation affects the stocks that dominate key indexes,” Steve Sosnick, chief strategist at Interactive Brokers, wrote in a note.

Meanwhile, the US Supreme Court didn’t rule on challenges to Trump’s tariffs Wednesday, leaving the world to wait until at least next week to learn the fate of his signature economic policy.

In Asia, the South Korean won is in focus after US Treasury Secretary Scott Bessent referred to excessive declines in the currency, offering rare verbal support as the won slides toward its weakest since 2009.

“Bessent’s comments can support the won in the near term, but markets may have more influence if they feel the fundamentals and politics are still in a worsening trajectory,” said Brendan McKenna, a strategist at Wells Fargo in New York.

The won weakened 0.2% against the dollar Thursday.

Attention will also be on Japan, where Prime Minister Sanae Takaichi will call a snap election early in the parliamentary session starting later this month. Equities in the country have jumped and the yen has come under pressure amid reports of a snap poll.

The yen fluctuated after Bessent spoke with Japanese Finance Minister Satsuki Katayama and noted the “inherent undesirability of excess exchange rate volatility.”

Read more: Gold’s Venezuela-Driven Boost Has Staying Power: Markets Pulse

Back to stocks, while the S&P 500 fell amid a slide in all “Magnificent Seven” shares, more than 300 of its firms actually rose. Small caps continued to outperform, with the Russell 2000 beating the S&P 500 for a ninth straight session — matching the longest streak since 1990.

On the macro front, US retail sales rose in November by the most since July, fueled by a rebound in auto purchases and resilient holiday shopping. Wholesale inflation picked up slightly on a jump in energy costs, even as prices for services were unchanged.