Asian Stocks Remain Unsteady After Heavy Selling
Asian stock markets fluctuated slightly on Tuesday after three days of heavy selling pressure in global markets. The MSCI Asia Pacific Index fell by around 0.1% after previously recording its biggest daily decline since early April. US stock futures also weakened in the Asian session, following the S&P 500's decline for four consecutive days. The "Magnificent Seven" tech giants fell around 1.8%, with Nvidia dropping nearly 2.8% ahead of its earnings release.
The main pressure came from tech stocks and companies related to artificial intelligence (AI). The market is starting to worry that massive spending on AI infrastructure has not been matched by commensurate revenue and profits. One analyst said the key question is no longer "is this a bubble," but how long this AI spending trend can last and how severe the impact of the correction will be when the euphoria wears off. These concerns have made sentiment on Wall Street even more fragile.
On a monthly basis, the S&P 500 index has fallen more than 3% and could potentially record its worst November since 2008 if this trend continues. The Cboe volatility index, or "fear gauge," has soared again, breaking through the 24 level and above the 20 area, which typically starts to raise market alert. This surge in volatility confirms that investors are in a cautious mode and ready to reduce risk if the situation worsens.
Meanwhile, market focus is also on the Federal Reserve's next move. The chance of an interest rate cut at its December meeting is now seen as less than 50%, as several Fed officials have warned of the risk of inflation if easing is carried out too quickly. However, Fed Governor Christopher Waller has consistently voiced support for a rate cut. Meanwhile, Bitcoin briefly shook sentiment after falling below US$90,000, before finally stabilizing around US$92,500. (asd)
Source: Bloomberg.com
