Asian stock markets experienced a sharp downturn on Monday, mirroring weak sentiment from Wall Street. KOSPI in South Korea plummeted over 5%, led by losses in major chipmakers like Samsung Electronics and SK Hynix. Hong Kong's Hang Seng index also suffered, declining 2.5%. This sell-off was fueled by growing AI concerns and mixed economic data from China.

Investor caution stemmed from rising costs associated with heavy AI investments, particularly after Microsoft’s recent earnings report. The focus now shifts to earnings from Amazon and Alphabet, considered key players in cloud computing and AI. Adding to the unease, the nomination of Kevin Warsh, known for his hawkish stance on monetary policy, further dampened market mood.

China's mixed economic signals also contributed to the negative sentiment. While the official manufacturing PMI showed a contraction, a private PMI offered a more optimistic view of export-oriented sectors. Markets in Japan, Australia, and Singapore also saw losses, reflecting the broader regional weakness. Investors are closely watching the tech sector for further developments.