Asian stocks fell on Tuesday after a selloff in U.S. chip shares, as investors awaited Nvidia's earnings to see whether the AI bellwether could beat lofty expectations and weighed Washington's sanctions threat against Iran.
South Korea's KOSPI led losses, falling as much as 4.3%, while Taiwan stocks dropped up to 1.2% and hit their lowest since August 7.
Chipmakers Samsung Electronics fell 2.1%, SK Hynix lost 4.3% and Taiwan Semiconductor Manufacturing Co slid more than 1%.
In corporate news, SK Hynix's union members narrowly rejected a tentative wage agreement, according to a source familiar with the matter.
With expectations for Nvidia running high, any surprise in its results on Wednesday could sway the artificial intelligence trade, which has been volatile this year.
That has been especially clear in the KOSPI, whose more than 22% drop in July halted this year's rally.
Although the KOSPI is still up 55.5% this year, the recent slide pushed the index into bear market territory, underscoring investor concern about whether heavy capital spending can be sustained.
"Nobody's asking if Nvidia beats anymore. They're asking by how much. Layer in a live PCE print and (Federal Reserve Chair Kevin) Warsh's first big test at Jackson Hole, and this is shaping up to be the week that decides September's tone across equities, rates and crypto alike," said Lukman Otunuga, head of market research at FXTM.
Elsewhere, Philippine stocks fell more than 1%, while Thai stocks lost 0.3%. Indonesian and Malaysian markets were closed for a holiday.
On Monday, the Trump administration warned countries to cut their business ties with Iran or face secondary sanctions as part of what it billed as an "economic D-Day," while Iran vowed to retaliate.
Oil prices fell after the warning and were largely flat on Tuesday, while the U.S. dollar climbed overnight from three-month lows.
U.S. yields fell on a report that the Treasury Department could tap its cash account to finance increased bond buybacks.
Apart from central bank meetings in Asia, investors were also awaiting Warsh's speech at the annual Jackson Hole conference on Friday for greater clarity on the Fed's outlook after a dearth of recent commentary.
Thailand's central bank is expected to leave rates steady on Wednesday, while those in South Korea and the Philippines were expected to raise rates by 25 basis points each.
The South Korean won gained slightly to trade near a near one-year high of 1,378.90 per U.S. dollar.
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