Asian markets battle to recover from tech rout after US data

HONG KONG, China — Asian traders struggled to fight back Friday after a tech-fuelled sell-off, taking heart from forecast-beating US growth data that reassured that the economy was still in rude health, but did not dent hopes for an interest rate cut.

The positive performance came despite more losses on Wall Street, where the so-called "Magnificent Seven" heavyweights -- which have been key to this year's markets surge -- suffered more selling as investors swapped out of them and into cheaper, small caps.

However, Taipei had a rough start as it reopened after being closed for two days by a typhoon, with chip giants including TSMC tanking as traders played catch-up with the recent rout, which was sparked by disappointing earnings from Tesla and Google-parent Alphabet.

Figures showing the US economy expanded far more than expected in the second quarter -- and much quicker than the previous three months -- provided a much-needed boost to sentiment and eased concerns that it was slowing a little too much for comfort.

The data was largely consumer-led, even while interest rates remain at two-decade highs and inflation is elevated.

However, the S&P 500 and Nasdaq both fell, with tech titans Nvidia, Microsoft, Amazon, Apple and Facebook owner Meta well in the red.

Attention now turns to personal consumption expenditure figures, which are due later in the day. The data is the Federal Reserve's preferred gauge of inflation and could give the central bank more room to cut borrowing costs.

A string of readings in recent months and dovish comments from Fed officials have seen bets on a September move soar, while some investors are also eyeing another one before January.

"The big picture is that the US economy has continued its gradual deceleration from last year, so there is no urgency for the Fed to start a new easing cycle as soon as next week," said NAB Rodrigo Catril.

"But looking ahead there are several indicators that suggest further cooling should be expected.

"For instance, intentions surveys suggest a pullback in capital expenditure is coming while a decline in income alongside rising unemployment point to an (easing) in consumption ahead."

Asian markets opened