Asian-Pacific markets displayed a mixed performance on Tuesday as investors grappled with the implications of renewed tariff threats from U.S. President Donald Trump and the potential disruption of software companies by artificial intelligence advancements.

Trump took to Truth Social on Monday, cautioning that countries attempting to “play games” with a recent Supreme Court decision would face significantly higher tariffs.

This statement came in the wake of a Supreme Court ruling on Friday, which invalidated tariffs imposed under the International Emergency Economic Powers Act. Trump retaliated by announcing a 15% global tariff under Section 122 of the 1974 Trade Act.

Lorraine Tan, Morningstar’s director of equity research, commented, “We anticipate minimal changes to existing agreements, as President Trump aims to leverage this strategy to enhance his negotiating position with countries currently in talks.” She further noted that she expects market responses to be relatively subdued.

Investors in Asia were also assessing China’s loan prime rate decision. China’s central bank on Tuesday keeping its benchmark lending rates unchanged at 3% for the one-year LPR and 3.5% for the five-year LPR.

The one-year LPR serves as a benchmark for new commercial loans, while the five-year LPR guides property loans.

Markets in mainland China were up 1.06% as the market reopens after the Lunar New Year holiday.

Hong Kong’s Hang Seng index was down 2%, dragged down by healthcare stocks. Labubu maker Pop Mart was the largest loser on the index, shedding 5%, after it released a new toy series Monday.

South Korea’s Kospi rose 2.11%, ending at 5,969.64. The index reached a new record high for the third straight session and was powered by a chip rally, while the small-cap Kosdaq added 1.13% to end at 1,165.

The Taiwan Weighted index also rode the chip rally to lead Asian markets, advancing 2.75% to a record 34,700.82. Chip giant Taiwan Semiconductor Manufacturing Company rose over 3.42%.

Japan’s Nikkei 225 gained 0.87% to 57,321.09, while the Topix was up 0.2% and ended at 3,815.98.

Australia’s S&P/ASX 200 gave up early gains, falling marginally to 9,022.3.

Overnight in the U.S., the Dow Jones Industrial Average dropped 1.66%, while the Nasdaq Composite declined 1.13%. The S&P 500 shed 1.04%.

Cybersecurity stocks dropped for a second day on Monday as investors fretted over new artificial intelligence security tools that threaten to displace the sector’s longstanding business models.

Anthropic on Friday debuted a new security tool to its Claude model in a limited research preview. The AI lab said the service could scan software code for vulnerabilities and suggest solutions. Anthropic is scheduled to host an enterprise briefing with new product announcements on Tuesday.Samantha Subin

Software stocks such as Microsoft and CrowdStrike were under pressure once again as AI disruption worries weighed on the market. Microsoft dropped 3%, while CrowdStrike retreated nearly 10%. 

— CNBC’s Samantha Subin, Sean Conlon and Sarah Min contributed to this report.