Asia markets trade mixed after Trump revives tariff threat and AI fears hit tech

Asia-Pacific markets traded mixed Tuesday as investors weighed renewed tariff threats from U.S. President Donald Trump and concerns that artificial intelligence could disrupt software companies.

Trump posted on Truth Social Monday that any country that wants to “play games” with the Supreme Court decision “will be met with a much higher tariff.”

The comments followed a Supreme Court decision Friday striking down tariffs enacted under the International Emergency Economic Powers Act. In response, Trump said he would impose a 15% global tariff under Section 122 of the 1974 Trade Act.

“We expect limited changes to the agreements already in place and also as we expect President Trump to use these means to improve his bargaining position with those countries where agreements are being negotiated,” said Lorraine Tan, director of equity research of Morningstar, adding that she expects market reactions to remain muted.

Investors in Asia were also assessing China’s loan prime rate decision. China’s central bank on Tuesday keeping its benchmark lending rates unchanged at 3% for the one-year LPR and 3.5% for the five-year LPR.

The one-year LPR serves as a benchmark for new commercial loans, while the five-year LPR guides property loans.

Markets in mainland China were up 1.06% as the market reopens after the Lunar New Year holiday.

Hong Kong’s Hang Seng index was down 2%, dragged down by healthcare stocks. Labubu maker Pop Mart was the largest loser on the index, shedding 5%, after it released a new toy series Monday.

South Korea’s Kospi rose 2.11%, ending at 5,969.64. The index reached a new record high for the third straight session and was powered by a chip rally, while the small-cap Kosdaq added 1.13% to end at 1,165.

The Taiwan Weighted index also rode the chip rally to lead Asian markets, advancing 2.75% to a record 34,700.82. Chip giant Taiwan Semiconductor Manufacturing Company rose over 3.42%.

Japan’s Nikkei 225 gained 0.87% to 57,321.09, while the Topix was up 0.2% and ended at 3,815.98.

Australia’s S&P/ASX 200 gave up early gains, falling marginally to 9,022.3.

Overnight in the U.S., the Dow Jones Industrial Average dropped 1.66%, while the Nasdaq Composite declined 1.13%. The S&P 500 shed 1.04%.

Cybersecurity stocks dropped for a second day on Monday as investors fretted over new artificial intelligence security tools that threaten to displace the sector’s longstanding business models.

Anthropic on Friday debuted a new security tool to its Claude model in a limited research preview. The AI lab said the service could scan software code for vulnerabilities and suggest solutions. Anthropic is scheduled to host an enterprise briefing with new product announcements on Tuesday.Samantha Subin

Software stocks such as Microsoft and CrowdStrike were under pressure once again as AI disruption worries weighed on the market. Microsoft dropped 3%, while CrowdStrike retreated nearly 10%. 

— CNBC’s Samantha Subin, Sean Conlon and Sarah Min contributed to this report.