Stocks Extend Losses, Gold Rallies on Haven Bid: Markets Wrap
(Bloomberg) — Global stocks extended losses after suffering their steepest drop in nearly a month on concerns over elevated valuations. Bonds advanced with gold as investors sought haven assets.
US equity-index futures slipped, signaling further declines for the S&P 500 and Nasdaq 100 indexes after the gauges pulled back with tech shares hit the hardest. Sentiment was shaky early in the Asian session after Super Micro Computer Inc. shares slumped in late trading and Advanced Micro Devices Inc. failed to impress investors with its revenue forecast.
Asian shares fell 1.1% with South Korea’s Kospi — a poster child for the artificial intelligence boom and one of this year’s top-performing markets — and Japan’s Nikkei dropping by more than 2%. Both indexes were off the session’s lows and Chinese gauges rose as mood improved. Contracts indicated European stocks were set for a weaker open.
As investors sought safety, Treasuries edged up, with the yield on the 10-year falling one basis point to 4.07%. Gold rebounded 1% on haven demand.
“A pullback was overdue after strong and steady gains in tech,” said Charu Chanana, the chief investment strategist at Saxo Markets in Singapore. “A firmer dollar, weaker crypto markets, and valuation concerns in US Big Tech have all combined to pressure risk sentiment.”
The pause in the global stock rally came after the booming outlook for AI and hopes the Federal Reserve will keep cutting rates sent the US stock benchmark up by almost 40% from its lows in April. But those gains have been confined to fewer shares as sentiment and technical indicators showed signs of overheating, leading Wall Street chiefs to note the possibility of a retreat as a healthy development.
Warnings about frothy stock valuations are easy to find after a record-breaking rally pushed prices to levels typically associated with exuberance. Optimism had turned intense in recent months, with many traders focused on chasing gains rather than questioning lofty prices.
Yet those solid gains, combined with the recent narrowness of the advance, spurred vulnerability worries. The flight to safety also spurred a debate over how low US Treasury yields may go.
DBS Bank saw US 10-year yields falling to as low as 3.8% from around 4.07% now, should equities continue to decline. TD Securities predicted that the benchmark will drop to 3.50% in late 2026.
“CEO warnings on valuations and capex spend have garnered attention,” said Prashant Newnaha, senior rates strategist at TD Securities. “Add in the US shutdown, soft data and thin liquidity and you have the recipe for risk-off to extend — bonds will be in demand as traders seek out the most liquid havens around.”
Selling pressure trimmed roughly $500 billion in combined market capitalization from the Philadelphia Semiconductor Index on Tuesday and a Bloomberg gauge tracking Asia chip stocks on Wednesday.
“There are concerns about AI and valuation, but I don’t think we’re at the late stage of the AI bubble, there’s still room to go, so there’ll be some bottom fishers,” said Xin-Yao Ng, a fund manager at Aberdeen Investments.
What Bloomberg strategists say…
While European stocks may come under pressure from the global risk-averse mood, their relative cheapness means that any selloff will be milder than what we saw on Wall Street on Tuesday.
— Ven Ram, MLIV strategist. For full analysis, click here.
Some investors also said that sentiment improved during the Asian day after the Chinese government’s announcement to continue to suspend its 24% tariffs on some US goods from Nov. 10 for a year while keeping 10% tariffs.
Technology stocks led the losses in Asia with Disco Corp. shares slumping about 8% and Samsung Electronics Co. 3.3%. South Korea briefly halted sell orders for program trading after Kospi 200 futures dropped more than 5%, triggering a so-called sidecar for the first time since April.
Elsewhere, the Australian dollar surged to a 12-year high against the kiwi early Wednesday after a jump in New Zealand’s jobless rate.
In commodities, oil steadied as traders weighed signs of increasing US inventories against easing trade tensions between the world’s two largest economies.
“It’s a sea of red across broad markets, and one that offers a gloomy and damp portrayal of risk,” Chris Weston, head of research at Pepperstone Group, wrote in a note to clients.
Meanwhile, the US government reached a major milestone of dysfunction as Congress allowed a federal shutdown to drag into its 36th day — the longest in history — amid a stalemate over health-care and spending priorities.
Corporate News:
Novo Nordisk A/S pared its forecast for a fourth time this year, citing lower-than-anticipated sales of its blockbuster drugs Wegovy and Ozempic. BMW AG’s profit margin came in toward the lower end of its guidance in the third quarter as tariffs and intense competition in China squeezed earnings. Volkswagen AG plans to develop its own advanced semiconductor chip to power advanced driver assistance systems. Toyota Motor Corp. raised its annual profit guidance after Japan’s trade deal with President Donald Trump avoided a worst-case-scenario for tariffs on cars and auto parts. Apple Inc. is preparing to enter the low-cost laptop market for the first time, developing a budget Mac aimed at luring away customers from Chromebooks and entry-level Windows PCs. Nintendo Co.’s stock rose by its most in six months after the company raised its Switch 2 outlook, a strong signal of confidence in the marquee console’s momentum ahead of the critical holiday season. Google and Epic Games Inc., maker of the popular Fortnite game, reached a settlement in their long-running antitrust fight over how developers distribute and monetize apps on Android phones, according to a court filing. Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 6:57 a.m. London time Nasdaq 100 futures fell 0.2% The MSCI Asia Pacific Index fell 1.1% Hong Kong’s Hang Seng fell 0.2% The Shanghai Composite rose 0.2% Euro Stoxx 50 futures fell 0.5% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1487 The Japanese yen was little changed at 153.70 per dollar The offshore yuan was little changed at 7.1323 per dollar The British pound was little changed at $1.3028 Cryptocurrencies
Bitcoin rose 1.8% to $102,089.54 Ether rose 3.7% to $3,333.59 Bonds
The yield on 10-year Treasuries declined one basis point to 4.08% Japan’s 10-year yield declined 1.5 basis points to 1.660% Australia’s 10-year yield declined four basis points to 4.31% Commodities
Spot gold rose 0.9% to $3,966.72 an ounce West Texas Intermediate crude was little changed This story was produced with the assistance of Bloomberg Automation.
–With assistance from Ruth Carson.
©2025 Bloomberg L.P.
