Japan and Hong Kong markets set for mixed open after AI sell-off drags Wall Street

Japan and Hong Kong stocks were set to open mixed Tuesday, with several Asia-Pacific markets closed for the Lunar New Year holiday.

Japan’s Nikkei 225 futures pointed to a lower open for the market. The futures contract in Chicago was at 39,150 and its counterpart in Osaka last traded at 39,050 compared to the index’s previous close of 39,565.8.

On Monday, Japan’s chip-related stocks fell on Chinese AI startup DeepSeek‘s challenge to America’s global leadership in artificial intelligence, threatening Asian tech companies part of the U.S. AI value chain.

Hong Kong’s Hang Seng index futures were at 20,431, stronger than the HSI’s last close of 20,197.77.

Australian, Taiwan, South Korean and Chinese markets are closed for holidays.

Investors will be monitoring India’s stock markets after the Reserve Bank of India on Monday announced a slew of plans to pump over $17 billion into the financial ecosystem through measures including bond purchases and currency swaps.

Overnight in the U.S., the S&P 500 and Nasdaq Composite plunged on concerns about an artificial intelligence stock bubble popping because of the emergence of Chinese startup DeepSeek, which has possibly made a competitive AI model at a fraction of the cost of Silicon Valley models.

The Nasdaq Composite lost 3.07%, falling to 19,341.83, and the S&P 500 slid 1.46% to 6,012.28. The Dow Jones Industrial Average added 289.33 points, or 0.65%, to close at 44,713.58. Gains in Apple, Johnson & Johnson and Travelers helped lift the 30-stock index.

Nvidia lost close to $600 billion in market cap on Monday, the biggest drop for any company on a single day in U.S. history.

—CNBC’s Lisa Kailai Han, Fred Imbert Pia Singh and Samantha Subin contributed to this report.