SINGAPORE – Asian stock markets experienced sharp swings on Wednesday as investors reacted to a global selloff and rising volatility, driven by concerns over stretched valuations in tech and AI-related stocks.

Tokyo’s Nikkei 225 (.N225) tumbled nearly 7% from Tuesday’s record high before recovering to close down 2.8%. South Korea’s Kospi (.KS11) plunged as much as 6.2%, finishing the session 2.9% lower. The broader MSCI Asia-Pacific index outside Japan (.MIAPJ0000PUS) dropped as much as 2.3%, its steepest fall since April, before paring losses to 0.9% lower.

Investors are retreating from record highs after Wall Street CEOs—including Morgan Stanley (MS.N) and Goldman Sachs (GS.N)—questioned whether sky-high valuations can be sustained. JPMorgan Chase CEO Jamie Dimon also warned of a heightened risk of a significant market correction over the next six months to two years.

“Investors are booking profits, particularly in AI-driven and high-growth tech stocks,” said Ed Yardeni of Yardeni Research. Matt Simpson, senior market analyst at StoneX, added that the sharp selloff reflects herd behavior as investors seek to protect gains from recent record highs.

Tech stocks bore the brunt of the losses. In Japan, SoftBank Group (9984.T) dropped as much as 14.3% after the Nasdaq Composite (.IXIC) fell 2% overnight. In South Korea, SK Hynix (000660.KS) slid 9.2%, while Samsung Electronics (005930.KS) lost 7.8%.

Meanwhile, Chinese shares rebounded after an initial dip. The CSI 300 (.CSI300) rose 0.5% following news that China’s State Council would suspend a 24% additional tariff on U.S. goods for a year, retaining a 10% levy after President Xi Jinping’s meeting with U.S. President Donald Trump.

Currency and commodity markets were mixed. The U.S. dollar initially fell against the yen but later stabilized at 153.655. The euro edged up to $1.1488, while the 10-year U.S. Treasury yield hovered at 4.0774%. Bitcoin recovered to $101,814.50, gold rose 1% to $3,971.60 per ounce, and Brent crude increased slightly to $64.51 per barrel.