Asian and global stock markets have been riding a wave of excitement and caution in equal measure this August, as investors digest a whirlwind of economic data, earnings reports, and the ever-present specter of a technology bubble. With the Federal Reserve’s next move looming and memories of past market manias still fresh, the current landscape is a fascinating mix of optimism, anxiety, and historical déjà vu.
On August 21, 2025, Asian stocks largely advanced, buoyed by a stabilization in technology shares after a recent selloff. According to Investing.com, Australia’s ASX 200 stood out, climbing 1% and breaking the 9,000-point mark for the first time ever. This record was driven by robust business activity data for August and a shift among investors toward economically sensitive sectors like financials and commodities. The country’s manufacturing and services sectors both posted faster growth compared to the previous month, giving local investors reason to cheer. Adding to the upbeat mood, logistics giant Brambles hit a record high after reporting a strong annual profit and announcing a $400 million share buyback.
Meanwhile, Chinese equities also had a banner day. The Shanghai Shenzhen CSI 300 rose 0.9%, reaching its highest level since October 2024, while the Shanghai Composite reclaimed a nine-year peak. As reported by Investing.com, this surge reflects growing optimism over Beijing’s potential economic support measures, even as recent economic data for July painted a less rosy picture. South Korea’s KOSPI rebounded sharply by 1% after three consecutive days of steep losses, suggesting that local tech stocks may have found their footing again after a global rout sparked by doubts about artificial intelligence profitability.
Not all regional markets shared in the exuberance. Hong Kong’s Hang Seng index was flat, with losses in internet heavyweight Baidu offsetting gains in other sectors. Baidu’s shares fell as much as 3% following a lackluster second-quarter earnings report, where AI investments only partially cushioned a continued decline in its core advertising business. The market is now awaiting earnings from other major players such as China Resources Power Holding, Li Ning Co Ltd, and Sinopec, which are expected to report in the coming days.
Japan’s Nikkei 225 and TOPIX indexes slipped by about 0.5%, extending their retreat from record highs earlier in the week. According to Investing.com, Japan’s manufacturing sector contracted again in August, though at a slower pace than expected, while service sector growth also cooled. India’s Nifty 50 managed a 0.3% gain, remaining above the psychologically important 25,000-point level after retaking it for the first time in over a month. PMI data showed that India’s manufacturing and services sectors outperformed expectations, signaling resilience in the face of increased U.S. trade tariffs and potential oil supply disruptions.
But beneath the surface of these regional gains, broader global trends are stirring concern. As reported by Barron’s, the Nasdaq Composite has fallen about 2.3% this week—double the decline of the S&P 500—driven by sharp pullbacks in tech giants Nvidia and Microsoft. While the S&P 500 has rallied 28% from its early April lows, thanks to participation from sectors beyond tech, the so-called “market breadth” is starting to wane. Adam Turnquist, chief technical strategist at LPL Financial, noted, “Market breadth helps assess the durability of a trend as it provides insight into how many stocks are participating in a price move. It also helps assess leadership trends by revealing what stocks are participating, and equally as important, what stocks are not.”
Turnquist explained that the number of stocks trading above their 200-day moving averages—a key performance benchmark—peaked at 68% at the end of July but has since slipped to around 65%. “It’s still bullish, but it’s not commensurate with breadth readings when the market is in record-high territory,” he said. Retail investors, who have been net buyers for 16 of the past 18 weeks, are also showing signs of fatigue. The Association of Individual Investors’ latest sentiment survey found that 45% of respondents are bearish on the market’s prospects over the next six months, a significant jump from the historical average of 31%.
September looms as a potential trouble spot. According to Bank of America, it is historically the weakest month for the S&P 500, with an average decline of 1.17%. Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, observed, “We continue to think the summer rally in the S&P 500 has generally made sense from a sentiment perspective, but is also starting to run out of room from that angle.” However, she acknowledged that megacap tech stocks like Nvidia and Microsoft have outpaced the broader market and are likely to continue leading, thanks to robust forward earnings outlooks. Consensus forecasts for Nvidia’s fiscal second-quarter earnings, due August 27, predict a 48% year-over-year jump in earnings and a 53% rise in revenue to $45.9 billion. Analyst Dan Ives of Wedbush was bullish, stating, “Nvidia earnings is another positive catalyst that will further remind investors this is still only the bottom of the second inning in the nine inning AI Revolution.”
Yet, if all this sounds familiar, it’s because history is rhyming once again. As The Telegraph reflects, the current AI and tech investment boom is drawing uncomfortable parallels with the dotcom bubble of the early 2000s. The turn of the century was marked by exuberant optimism, only for the bubble to burst and leave investors with heavy losses. The article notes, “Few things better characterised the ‘irrational exuberance’ of the age than the auctions of 3G mobile phone licences that took place around that time.” Governments raked in billions, but many companies overpaid and suffered in the aftermath.
Today, the scale of investment is staggering. Microsoft has earmarked $80 billion for data centers, Meta has already spent over $30 billion this year and plans to invest $100 billion next financial year, Alphabet has poured $40 billion into capital spending in just two quarters, and Amazon has spent nearly $60 billion. The battle for top AI talent is so intense that OpenAI CEO Sam Altman recently revealed that some team members have received signing bonus offers exceeding $100 million from competitors like Meta. Thousands of AI-related startups are riding the hype, hoping to become the next big winner.
But the warning signs are there. According to a recent MIT Nanda initiative survey, only about 5% of AI pilot programs at the company level deliver meaningful revenue or profit gains. Valuations are sky-high: two-thirds of S&P 500 stocks trade at 30 times earnings or more, and one-third at 50 times or more—levels reminiscent of the dotcom bubble. The market capitalization of the tech-heavy Nasdaq is now 145% of the entire U.S. M2 money supply, a figure even higher than before the dotcom crash.
As the world’s eyes turn to Fed Chair Jerome Powell’s upcoming speech at the Jackson Hole Symposium, investors are left to ponder whether this time is truly different. The stakes are enormous, and while the technology may be new, the lessons of history are never far away.
The story unfolding in global stock markets is a complex one—a blend of hope, hype, and hard-earned experience. As investors weigh the risks and rewards of the AI revolution, one thing is clear: the path ahead is as thrilling as it is uncertain.