Asian stock markets closed mostly lower on Tuesday, with major indices in Japan, Australia, South Korea, and Hong Kong all posting declines. The cautious trading followed a mixed session on Wall Street where artificial intelligence stocks rallied but broader market sentiment remained weak. High oil prices and upcoming corporate earnings reports further weighed on investor confidence in the region.

In Japan, the Nikkei 225 index dropped 0.6% in early trading to reach 64,512.35. Australia’s S&P/ASX 200 fell 0.8% to 8,772.10, while South Korea’s Kospi suffered a sharper 2.8% loss to 5,605.31. In East Asia, the Hang Seng Index in Hong Kong decreased by nearly 1.0% to 23,947.37. The Shanghai Composite remained relatively stable, finishing little changed at 3,732.29.

The previous session on Wall Street saw a divergence between technology and the rest of the market. The S&P 500 rose 0.4% to 7,690.73, marking a recovery from its worst week since June. The Nasdaq composite rallied 1.1% to 26,430.89, driven largely by strength in AI-related names. Nvidia, the largest U.S. stock by market value, added 1.4% and was a primary driver of the index gains. SpaceX, which controls the xAI business, also rose 1.3%. However, the Dow Jones Industrial Average finished down 0.1% at 51,966.03, as most U.S. stocks outside of AI and tech sectors declined.

Analysts note that investors are currently waiting for a series of earnings reports from major companies, which is contributing to the hesitation in Asian markets. In the bond market, concerns over funding for AI infrastructure have kept yields elevated. The yield on the 10-year Treasury climbed to 5.14% from 5.09% late Friday, continuing a trend of high levels in recent years.

Energy prices remained high due to uncertainty regarding the timeline for normalizing operations after the war with Iran. Benchmark U.S. crude oil rose 0.15% to $103.50 a barrel, while Brent crude increased 0.07% to $109.47 a barrel. In currency markets, the U.S. dollar edged down slightly to 158.45 Japanese yen from 158.46 yen, while the euro stayed nearly flat at $1.1225.

Elon Musk, founder of SpaceX, has stated he intends to give one share of SpaceX to every child in America next year.