Asian Stocks Drop After US Selloff, Gold Rebounds: Markets Wrap

(Bloomberg) — Asian equities retreated from a record after concerns over the impact of artificial intelligence on various sectors spurred a selloff in US technology stocks. Gold rebounded.

The MSCI Asia Pacific Index fell 0.8%, its first decline in six sessions, with roughly three stocks dropping for every one that advanced. The slide followed losses in US benchmarks, where megacaps slumped and weakness spread to logistics and commercial real estate, reflecting concerns about AI’s impact.

Even so, some signs emerged in early Asian trading that the cross-asset selloff may be easing. Applied Materials Inc. surged 10% in late trading after a surprisingly upbeat sales forecast. Gold rose 1% to recoup some of Thursday’s losses when algorithmic traders had appeared to amplify the precious metal’s sudden drop. Bitcoin also edged higher after four days of losses.

Treasuries held their gains from the prior session when the cross-asset weakness sent investors to the perceived safety of US government bonds. Yields on the benchmark 10-year rose almost two basis points to 4.11% on Friday.

The sharp swings in US trading reflected the rising stakes tied to the AI boom and the unpredictable ripple effects across sectors, regions and asset classes. The moves highlighted how quickly shifts in sentiment around AI can reverberate far beyond the technology sector, with precious metals tumbling and traders plowing money into Treasuries.

“Software stocks are now trading like banks in 2008,” said Nick Ferres, chief investment officer of Vantage Point Asset Management in Singapore, referring to the global financial crisis. “Asia has performed well so far this year, but I am concerned about correlation to global markets and a tactical unwind,” he said.

Read: AI Angst in US Stocks Sends Global Money Chasing Asia’s Winners

Thursday’s losses erased the year-to-date gains for the S&P 500. In comparison, the MSCI Asia Pacific Index is up more than 12% this year, building on gains in each of the past three years.

Also, technology shares have performed well with MSCI’s gauge for the sector up 21%. The Kospi Index in South Korea, a poster child for AI investments, has gained 31% and is the world’s best-performing stock market this year.

A key event for markets is coming up later Friday with the release of US January inflation data. The median forecast is predicting a year-over-year increase of 2.5% for the core consumer price index, which strips out food and energy.

Traders continued to assign little chance that Federal Reserve officials will lower rates when they meet next in March, with a July cut fully priced in.

Friday’s inflation print has gained added significance after Wednesday’s jobs numbers indicated strength in the US economy. That prompted traders to pare bets on interest-rate cuts by the Federal Reserve. Money markets pushed back bets for an easing to July from June previously.

Markets are complacent on the outlook for US inflation, making trades that pay out if price pressures climb look attractive, said Benjamin Wiltshire at Citigroup Inc. Investors may be underestimating the resilience of the US consumer and market expectations for inflation are likely to be revised slightly higher, he noted.

“Markets seem to have this conviction that inflation is going to come down,” Wiltshire said in an interview. “We’re still in a structurally higher inflation environment.”

Meanwhile, Anthropic completed a deal to raise $30 billion in funding from investors at a $380 billion valuation, including the money raised. Elsewhere, OpenAI has warned US lawmakers that its Chinese rival DeepSeek is using unfair and increasingly sophisticated methods to extract results from leading US AI models, according to a memo reviewed by Bloomberg News.

In trade developments, the US and Taiwan finalized an agreement to lower tariffs, boost market access for American products in Asia and direct billions of dollars into US energy and technology projects.

Corporate Highlights:

Clear Street Group Inc., a Wall Street broker built on cloud computing technology, has postponed its US initial public offering after cutting the target by nearly two-thirds. OpenAI is releasing its first artificial intelligence model that runs on chips from semiconductor startup Cerebras Systems Inc., part of a push by the ChatGPT maker to broaden the pool of chipmakers it works with beyond Nvidia Corp. Westpac Banking Corp.’s first-quarter profit advanced amid gains in home loans and strong growth in institutional lending. CK Hutchison Holdings Ltd. has warned A.P. Moller-Maersk A/S of legal action should the Nordic company’s terminal unit try to take over operations at two ports near Panama’s strategic canal. Some of the main moves in markets:

Stocks

S&P 500 futures were little changed as of 10:30 a.m. Tokyo time Japan’s Topix fell 1.1% Australia’s S&P/ASX 200 fell 1.3% Hong Kong’s Hang Seng fell 1.5% The Shanghai Composite fell 0.4% Euro Stoxx 50 futures rose 0.2% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1865 The Japanese yen fell 0.4% to 153.33 per dollar The offshore yuan was little changed at 6.9007 per dollar Cryptocurrencies

Bitcoin rose 0.6% to $66,168.79 Ether rose 0.9% to $1,939.49 Bonds

The yield on 10-year Treasuries advanced two basis points to 4.11% Japan’s 10-year yield declined two basis points to 2.210% Australia’s 10-year yield declined six basis points to 4.75% Commodities

West Texas Intermediate crude rose 0.2% to $62.95 a barrel Spot gold rose 1% to $4,969.97 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Richard Henderson.

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