Asia-Pacific markets set to open subdued after Wall Street's AI-linked stocks slide

Asia-Pacific markets were set to open mixed Friday after a rotation out of chip stocks on Wall Street lifted the Dow Jones Industrial Average to a record close overnight.

The Chicago futures contract for Japan’sNikkei 225was at 67,450 and its Osaka counterpart last traded at 67,610 compared with the index’s previous close of 67,470.69.

Hong Kong’sHang Seng indexfutures last traded at 25,158, lower than the index’s Thursday close of 25,253.40.

Futures for Australia’s S&P/ASX 200′s were last at 8,739, higher than the index’s previousclose of 8,686.10.

Overnight in the U.S., theDow Jones Industrial Averagerallied to a fresh all-time high, while theNasdaq Compositeunderperformed as investors appeared to rotate out of chip names in favor of non-tech stocks.

The 30-stock Dow jumped 874.86 points, or 1.73%, to close at a record 51,561.93. The Nasdaq lost 0.09% and ended at 26,830.96, while theS&P 500rose 0.41% to 7,584.31.

The rotation was sparked by a sell-off inBroadcomthat led investors to pare exposure to AI-linked stocks. The chipmaker slid more than 12% after itsfiscal second-quarter revenue missed estimates. Chip names, which led the latest leg higher in the market’s rally to record levels, fell broadly. TheVanEck Semiconductor ETF (SMH)lost more than 1%.Arm Holdingsshed more than 4%, whileMicron Technologyfell close to 8%.

Stocks also came under pressure on Middle East worries. Mixed messages have emerged recently out of negotiations to end the war, which has upset global markets and causedoiland gasoline prices to spike.

— CNBC’s Spencer Kimballand Lisa Kailai Han contributed to this report.