[MARKET ANALYSIS] Asia-Pac stocks trade mixed amid tech stength and the US imposing tariffs on drones

APAC Stocks: Mixed

• Asia-Pac stocks trade mixed as the region only partially sustains the positive handover from Wall St, where the S&P 500 hit a fresh record high, and the Nasdaq outperformed on tech strength and as softer PPI data further added to the case for the Fed to refrain from hiking rates in September. Nonetheless, the positive momentum began to wane overnight with little fresh major catalysts and following the announcement that US President Trump signed a proclamation imposing tariffs on drones and components.

ASX 200: -0.9%

• Index is pressured as the strength in tech is overshadowed by losses in the heavy industries, including miners, materials, resources and industrials, while participants also digest earnings releases.

Nikkei 225: +0.9%

• Gained and briefly reclaimed the 69,000 level before paring some of the advances, while participants continue to second-guess whether the BoJ will speed up the pace of rate increases with a hike in September.

KOSPI +1.5%

• Outperforms on tech-related momentum but is off earlier highs with resistance seen at the 7,000 level.

Hang Seng & Shanghai Comp: Hang Seng -0.9% / Shanghai Comp -0.4%

• Chinese markets are subdued amid a slew of earnings releases including from SMIC and JD.com, with the latter pressured despite beating on the top and bottom lines, while sentiment is also not helped by trade-related frictions with the US to impose tariffs of up to 100% on drones, which seems to be aimed at China and market leader DJI, which holds aorund an 80% share of the global drone market.

US Equity Futures: Rangebound

• Price action is rangebound following the prior day's advances.

European Equity Futures +0.4%

• Indicate a positive cash market open with Euro Stoxx 50 futures up 0.4% after the cash market closed with gains of 0.2% on Thursday.

A session wrap of this kind reads as consolidation after a US-led record close, a pattern that has typically left APAC indices unable to fully sustain the handover absent a fresh regional catalyst. The distinguishing feature is the split within the region: tech-heavy markets tracking the Nasdaq outperformance versus resource-heavy indices dragged by miners and industrials, a divergence that has recurred whenever the US lead is narrow and sector-specific. The tariff proclamation on drones and components fits the established pattern of sector-targeted trade measures aimed at Chinese manufacturers; comparable episodes have tended to pressure the named sector and China-facing sentiment while leaving broader indices largely intact, with retaliation risk the usual follow-on. Softer PPI feeding the no-hike narrative follows the familiar sequence in which secondary inflation prints move rate expectations only at the margin relative to the headline releases. The points of interest ahead are any Chinese response to the drone measures, the BoJ rate debate referenced in the Nikkei's price action, and whether US futures break their range on the next data point.