Asian Stocks Weaken, AI Rally Concerns Weigh on Market Sentiment
Asian stock markets weakened on Friday (July 3), putting regional benchmark indices on track for a second consecutive weekly decline. The pressure arose as investors grew concerned that the AI-driven stock rally had gone too far.
Stock indices in Japan and South Korea declined, dragging the MSCI Asia Pacific Index down 0.4%. This decline followed pressure on Wall Street, where the Nasdaq 100 fell 1.6% and the US chip index plunged more than 5%. South Korea's Kospi, one of the best-performing major indices this year, fell 0.8%, with SK Hynix among the stocks under pressure.
Technology stocks were once again in the spotlight, particularly chipmakers. While the long-term prospects for AI remain strong, investors are beginning to question whether already high valuations can be sustained amidst heavy spending, increasing competition, and the potential shift of users to cheaper AI solutions.
In commodity markets, US crude oil prices weakened again in early trading on Friday, falling below US$68.50 per barrel. This decline occurred after tanker traffic through the Strait of Hormuz increased, adding short-term supply to the market. Meanwhile, gold maintained its gains from the New York session and traded around US$4,125 per ounce, supported by weaker US employment data.
Nonfarm Payrolls data showed the US economy added only 57,000 jobs in June, while downward revisions to the previous two months dampened the strong impression from the previous report. The unemployment rate fell to 4.2% as labor force participation weakened sharply. This led the market to trim expectations for additional Fed interest rate hikes, although the possibility of at least one hike this year remains factored in. (asd)
Source: Newsmaker.id
