Asia stocks try to steady after Wall St selloff dims mood

Asian stock markets stabilized after a wobbly start on Tuesday, February 24, 2026, as investors reacted to a Wall Street selloff driven by AI disruption fears and heightened anxiety over U.S. President Donald Trump's tariff policies and geopolitical tensions. MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.4% despite the initial volatility, with benchmarks in Taiwan and South Korea both hitting record highs. Tokyo's Nikkei 225 rose 0.8% while China's CSI 300 gained 1.3% as markets there played catch-up after a holiday, with S&P 500 e-mini futures up 0.3% suggesting some recovery in U.S. markets. The stabilization came after a turbulent session on Wall Street where the S&P 500 fell 1.0% and the Nasdaq Composite dropped 1.1% amid fears over AI's disruptive impact on software and other industries, exacerbated by a bearish analysis from Citrini Research that heightened investor anxiety. Market analysts noted that while Asian equity markets have less direct exposure to mega-tech stocks compared to the U.S., they remain significantly exposed to the AI revolution, benefiting from this exposure without the same valuation concerns that have plagued U.S. tech shares. However, concerns are mounting about stocks that have performed exceptionally well over the past 12 months, with Rupal Agarwal, Asia quant strategist at Bernstein, warning that 'with valuations at a record high and earnings revisions showing signs of peaking, the risk of reversal in these stocks is high,' comparing the current situation to the 2000 and 2020 market cycles. Adding to market uncertainty, President Trump's tariff policies continued to create confusion and concern among international trading partners, with the President warning countries against backing away from recently negotiated trade deals after the Supreme Court struck down his emergency tariffs, instead threatening higher duties under Section 122 of the Trade Act of 1974. In response, Japan's trade minister requested favorable treatment under the new U.S. tariff regime, while Taiwan's government announced it would seek assurances to maintain beneficial terms already agreed with the U.S. Meanwhile, the CBOE Volatility Index rose 1.9 percentage points to 21.01, reflecting increased market anxiety, while the U.S. dollar strengthened against the yen and the Chinese yuan saw modest gains despite Beijing setting its daily fixing at the strongest level in almost three years. In commodities markets, Brent crude rose 0.8% amid tensions between the U.S. and Iran, while precious metals and cryptocurrencies remained volatile, with gold down 0.9% and Bitcoin falling 1.3%.