Asian Stocks Set for Gains as Tech Selloff Eases: Markets Wrap
(Bloomberg) — Asian equities were primed to rebound Friday after dip buyers powered a recovery on Wall Street from a chip-stock selloff fueled by concerns about the artificial intelligence trade. Treasuries rallied on haven demand and the dollar slipped.
Equity-index futures for Japan, South Korea and Australia pointed to gains at the open. The S&P 500 erased losses and edged up to close 0.3% higher on Thursday, while the Nasdaq 100 Index ended little changed. A tone of caution prevailed as contracts for US benchmarks edged lower in early Asian trading.
The pressure on chip stocks eased after Nvidia Corp. Chief Executive Officer Jensen Huang defended the financial health of AI computing supplier CoreWeave Inc. The company’s shares rose 4%, after a 12% tumble in the previous session. The Philadelphia Semiconductor Index pared its losses to less than 1%, having earlier fallen as much as 4.4%.
Declines in equities drove some investors toward the safety of bonds, helping Treasuries rally across maturities Thursday. The yield on the benchmark 10-year fell 13 basis points to 5.06%. The dollar weakened, while gold climbed. US crude oil edged lower on Friday to about $97.60 a barrel.
Indonesian stocks will be in focus after the country faced a potential ejection from global stock indexes.
Attention now turns to whether the rebound in equities can broaden after the selloff exposed growing unease over the heavy concentration of gains in AI-linked stocks. Signs of a rotation into other parts of the market may offer equities a firmer footing after months in which technology shares dominated returns.
“After a strong run in AI stocks the past few months, value shares got way too cheap, while tech got quite expensive amid the artificial-intelligence frenzy,” said Brian Frank, president and portfolio manager at Frank Funds. “We’re still looking for companies that have good credit and trade at discounts in case growth or consumer spending ebbs on sticky inflation.”
There were already signs of a broader shift on Wall Street. An equal-weighted version of the S&P 500 Index climbed 1.4%, with healthcare and consumer-staples shares leading gains.
Questions over the durability of the AI investment boom are spilling into credit markets as investors scrutinize the debt financing the infrastructure buildout.
A measure of CoreWeave’s credit risk climbed to an all-time high Thursday as some of its high-yield bonds extended declines.
Attention now turns to Federal Reserve Chair Kevin Warsh’s remarks on Friday to see if Fed officials will move toward another rate increase in October after a hotter-than-estimated inflation print last week.
Warsh is due to speak in Bangkok at a fireside chat. Last month, Fed officials lifted borrowing costs for the first time since 2023 and futures now imply about a 25% chance of a rate hike in October.
“On balance, we think Warsh will talk in a way that does not suggest an October hike,” said Krishna Guha at Evercore. “Warsh will be mindful of the global wobble in tech stocks and signs financing conditions are tightening for more exposed AI names, on top of the prior move up in longer-term yields.”
Corporate Highlights:
Three CoreWeave Inc. co-founders have sold $3.3 billion in company shares since last year’s initial public offering. Toyota Motor Corp.’s latest compact crossover will roll out of a plant in Ontario starting in December. Meta Platforms Inc. made one of its new artificial-intelligence models available for developers to download and modify, while keeping its most advanced technology closed in an effort to convert its AI investments into revenue. Super Micro Computer Inc. has appointed Mark Long as chief financial officer, saying it aims to grow more quickly in the AI era. Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 8:13 a.m. Tokyo time Hang Seng futures rose 0.9% Australia’s S&P/ASX 200 rose 1.1% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1214 The Japanese yen was little changed at 158.10 per dollar The offshore yuan was little changed at 6.6899 per dollar The Australian dollar was little changed at $0.6920 Cryptocurrencies
Bitcoin rose 0.2% to $82,146.32 Ether fell 0.4% to $2,440.89 Bonds
Australia’s 10-year yield was little changed at 5.22% Commodities
West Texas Intermediate crude fell 0.4% to $97.57 a barrel Spot gold fell 0.2% to $4,163.87 an ounce This story was produced with the assistance of Bloomberg Automation.
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