Asian stocks set for positive open after choppy US session

While a US gauge of chipmakers closed little changed, a closely watched exchange-traded fund tracking software firms slipped 2.2%. Gold and silver tumbled

• Asian stocks set for gains despite thin holiday trading
• AI concerns drive volatility in US and Asian equity markets
• RBNZ policy decision in focus; rates expected to stay on hold

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Asian stocks are set for a positive open in thin holiday trading, while US shares whipsawed as traders struggled to assess the outlook for artificial intelligence.

Equity futures point to gains for Australian and Japanese benchmarks, after the S&P 500 finished flat on Tuesday in another volatile session. While a US gauge of chipmakers closed little changed, a closely watched exchange-traded fund tracking software firms slipped 2.2%. Gold and silver tumbled.

Anxiety around artificial intelligence is also reverberating across Asia, home to much of the world’s chip development and hardware manufacturing. A regional equities gauge has fallen for three straight sessions — its longest losing streak in nearly a month — making any rebound on Wednesday a welcome relief for investors.

Still, volumes are expected to be light with markets in China, Hong Kong, Malaysia, Singapore, South Korea, Taiwan and Vietnam remaining closed for the Lunar New Year holiday.

“Asian equities should see a positive open,” Chris Weston, head of research at Pepperstone Group wrote in a note. “Attention will focus on whether buyers step up after the initial opening orders are filled.”

The turmoil unleashed by AI reflects concerns that are increasingly at odds. One is that it’s poised to disrupt entire segments of the economy so dramatically that investors dump stocks of any company seen at the slightest risk of being displaced by the technology. The other is a deep skepticism that the billions of dollars spent in AI will deliver big payoffs soon.

“The market is still close to record highs, but it may not feel that way to some investors because of the sharp selloffs that seem to derail upswings almost as soon as they begin,” said Chris Larkin at E*Trade from Morgan Stanley. “If that theme persists, it could result in a bumpy road for the market, even if the overall trend is to the upside.”

The yield on 10-year Treasuries closed about one basis point higher at 4.06%. Bitcoin sank to around $67,500. Australian bond yields edged higher in early Wednesday trading.

In Asia, the focus will shift to the Reserve Bank of New Zealand’s policy decision later Wednesday. All economists in a Bloomberg survey expect the Official Cash Rate to remain on hold, with focus on the bank’s policy rate outlook and tone of Anna Breman’s first post-meeting press conference since taking over as Governor last year.

“Markets are going into it with a hawkish mindset, with a hike priced in by about October and a second by around February next year,” ANZ Group Holdings Ltd. strategists including David Croy wrote in a note to clients. “But that is shy of the elevated expectations seen a few weeks ago, and that cooling of expectations suggests we will see less of a reaction if the RBNZ is cautious today.”

In commodities, oil slipped on signs that the US and Iran have made progress in nuclear talks.