### Asian Stocks Plunge Amid Tech Sell-Off and Economic Concerns

Asian stock markets experienced considerable declines on Thursday, mirroring significant losses on Wall Street, as mounting concerns over the U.S. economy and government debt took their toll. Technology stocks were hit particularly hard.

Japanese markets felt the strain from new data indicating that local business activity had contracted in May, a consequence of increasing U.S. trade tariffs. Broader Asian markets were pressured primarily by losses in tech stocks, which gave up some of their recent gains after a rise in government bond yields. Investor sentiment was also negatively impacted by persistent uncertainty surrounding U.S.-China trade relations and reports suggesting Russia is not in a hurry to end the war in Ukraine.

In stark contrast, S&P 500 Futures saw a marginal rise during Asian trading hours following a 1.6% slump in the S&P 500 on Wednesday.

Technology-focused stock indexes bore the brunt of the downturn, with South Korea's KOSPI index dropping 1.2% and Hong Kong's Hang Seng index declining by 0.5%. The slump in these tech sectors coincided with similar declines among their U.S. counterparts, driven by increasing bond yields and some profit-taking activities. Sentiment in the tech sector was further dampened by China's vocal criticism of stricter U.S. controls on tech exports and its domestic chipmaking industry. Notably, Nvidia CEO Jensen Huang labeled U.S. chip controls on China as a "failure."

Individual tech stocks also suffered, with Baidu Inc. falling nearly 3% despite surpassing first-quarter earnings expectations. Hong Kong shares of battery giant Contemporary Amperex Technology shed 2%, affected by profit-taking following a strong debut earlier in the week.

Adding to the unease, a spike in U.S. Treasury yields placed additional pressure on the tech sector, as investors became increasingly worried about high U.S. government debt levels after Moody's downgraded the country's sovereign rating. The market's focus is now on an upcoming tax cut bill that could lead to even higher debt levels in the world's largest economy.

Japanese shares also tumbled, as the Nikkei 225 lost 0.9% and the TOPIX dropped 0.5% after underwhelming flash purchasing managers index (PMI) data for May. Japan's Manufacturing PMI contracted for the eleventh consecutive month, impacted by high U.S. trade tariffs on export orders. Growth in the services PMI also slowed sharply, pushing Japan's composite PMI into contraction for the second time in three months. These figures came shortly after weak trade data for April, underscoring the difficulties faced by Japanese businesses.

Other Asian markets largely retreated, following losses in their U.S. counterparts. However, China's Shanghai Shenzhen CSI 300 and Shanghai Composite indexes recorded small gains on growing hopes for additional economic stimulus from Beijing. Singapore's Straits Times index fell 0.5%, despite slightly better-than-expected GDP growth in the first quarter.

Australia's ASX 200 index declined by 0.5%, pulling back from a three-month high as PMI data revealed a downturn in the services industry. In India, Nifty 50 Futures indicated a flat open, following the index’s halt to a series of losses on Wednesday, with Indian PMI readings expected later in the day.

Despite Baidu’s headline-grabbing fall, advanced AI algorithms from InvestingPro suggest that Baidu may not be the top stock to watch in the current market environment.