Investing.com-- Most Asian stocks fell on Wednesday as risk appetite was rattled by U.S. President Donald Trump threatening more trade tariffs, while signs of cooling economic growth also weighed.

Hong Kong markets were outliers, rising sharply as a rally in major Chinese internet stocks resumed on persistent optimism over the country’s artificial intelligence capabilities. Gains also spilled over into mainland Chinese markets. 

Broader Asian markets took a weak lead-in from Wall Street, which ended lower for a fourth straight session as weak consumer confidence data fueled increased concerns over a cooling U.S. economy. 

Trump added to the negative sentiment by threatening to impose tariffs on copper. He had earlier this week also signaled that 25% tariffs on Canada and Mexico will be imposed by early-March. 

U.S. stock index futures rose in Asian trade, indicating that Wall Street may be due for some bargain buying. But investors remained skittish ahead of earnings from tech major NVIDIA Corporation (NASDAQ:NVDA), which are due later on Wednesday. 

Hong Kong tech rally resumes 

Hong Kong’s Hang Seng index was the best performer in Asian trade on Wednesday, rising more than 2% on strength in major tech stocks. 

The Hang Seng was close to a two-year high, having rallied sharply over the past month as optimism over China’s AI capabilities saw investors pile into local tech stocks. Majors such as Baidu (NASDAQ:BIDU) Inc (HK:9888), Alibaba (HK:9988), and Tencent Holdings Ltd (HK:0700), were a major beneficiary of this trend. 

While the tech rally was seen cooling in recent sessions, analysts still expected Chinese tech to push higher, especially as recent corporate earnings showed encouraging trends for AI adoption in the country. 

Optimism over AI also benefited adjacent sectors such as semiconductors and utilities, helping drive gains in broader Chinese markets. China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes were mildly positive on Wednesday, and were also sitting on strong gains in the past month. 

Asian tech skittish with Nvidia in focus 

Other Asian tech stocks were less upbeat, as investors soured on the sector- especially on companies with U.S. exposure- ahead of key earnings from Nvidia.

The stock was also nursing three days of steep losses, amid some profit-taking, and as investors turned cautious over the outlook for the AI sector. 

Tech-heavy Asian bourses retreated on Wednesday, with Japan’s Nikkei 225 down 0.5%, while South Korea’s KOSPI shed 0.1%. 

TSMC (TW:2330)- a major Nvidia supplier- fell 0.5% in Taiwan trade, while Hon Hai Precision Industry (TW:2317), also known as Foxconn, fell 0.3%. 

Broader Asian markets mostly moved in a flat-to-low range, as weak U.S. economic data and Trump’s tariff threats kept risk appetite under pressure.

Australia’s ASX 200 fell 0.3% after consumer price index inflation data read slightly weaker than expected for January. But underlying inflation rose, while overall inflation still remained sticky, giving the Reserve Bank little impetus to cut interest rates further. 

Singapore’s Straits Times index was flat, while Japan's TOPIX index fell 1.1%.