Asian shares retreat in cautious trading ahead of Nvidia profit report

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TOKYO (AP) — Asian shares retreated in cautious trading Wednesday ahead of an earnings report from Nvidia that is seen as a bellwether for the recent craze for artificial intelligence technology.

Japan's benchmark Nikkei 225 was nearly unchanged at 48,724.17.

Hong Kong’s Hang Seng dropped 0.5% to 25,812.54, while the Shanghai Composite slipped just over 1 points to 3,939.29.

Australia's S&P/ASX 200 shed 0.1% to 8,458.40, while South Korea's Kospi shed 0.5% to 3,934.58.

Nvidia was due to report its earnings for the last quarter later in the day. A U.S. jobs report due out Thursday, after a hiatus in updates due to the U.S. government shutdown, is another factor weighing on market sentiment.

On Tuesday, share prices fell worldwide, with Nvidia leading Wall Street lower with a drop of 2.8%. That brought the chip maker's loss for the month so far to more than 10%, a steep enough fall to be deemed a correction.

The S&P 500 declined 0.8% to 6,617.32, retreating further from its all-time high set late last month. The Dow Jones Industrial Average lost 1.1% to 46,091.74, while the Nasdaq composite sank 1.2% to 22,432.85.

Nvidia's performance matters disproportionately to savers’ 401(k) accounts because its immense size means it’s the most influential stock on Wall Street. It single-handedly steers the direction of the S&P 500 some days, after fervent demand for its artificial-intelligence chips helped it briefly top $5 trillion in total value.

The U.S. stock market’s recent struggles are a sharp turnaround from its nearly relentless rally since April, when Wall Street last sold off after President Donald Trump shocked the world with stiff tariffs.

That rally was so strong that critics say it may have carried prices too high, too fast and left the market at risk of a sharp drop. They point in particular to stocks swept up in the AI mania, which have been surging at spectacular speeds for years.

Traders also had earlier expected the Federal Reserve will cut its main interest rate at its next meeting in December, but now they aren't as sure. The Fed has cut rates twice already this year in hopes of shoring up a slowing job market. But lower interest rates can make inflation worse, and inflation has stubbornly remained above the Fed’s 2% target.

Many big investors still seem to expect stock prices to rise further, according to the latest monthly survey of global fund managers by Bank of America Global Research. But when asked what the No. 1 risk for the market is, one with a lower probability of happening but a chance of very big damage, 45% pointed to an AI bubble. That beat out potential trouble in the bond market, inflation and trade wars.

Other high-flying areas of the market have also been struggling lately. Bitcoin’s price briefly fell below $90,000 on Tuesday, down from nearly $125,000 last month. It later recovered some of its losses. Early Wednesday, it was down 1.3% at $91,700.

In other dealings early Wednesday, the U.S. dollar fell to 155.46 Japanese yen from 155.51 yen. The euro was unchanged at $1.1581.

In energy trading, benchmark U.S. crude lost 19 cents to $60.48 a barrel. Brent crude, the international standard, fell 20 cents to $64.69 a barrel.

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AP Business Writer Stan Choe contributed.