Asian shares wobble as tech rout boosts bonds and dents rate hike bets
SPY•Asian shares fell as concerns over AI funding needs hammered technology stocks and sent Treasuries to their biggest daily rally in more than three years. Markets pared back expectations for Fed tightening, with a December rate rise no longer fully priced.
1. Stocks retreat
MSCI’s broadest index of Asia-Pacific shares excluding Japan fell 0.3% on Friday, bringing its weekly loss to 2.7% and marking a fourth straight week in the red. Japan’s Nikkei dropped 1.3%, while South Korea’s KOSPI fell 1.7%; the Nasdaq had slumped more than 2% overnight.
2. Bonds rally
The 10-year Treasury yield fell more than 19 basis points overnight, its biggest drop since March 2023, before steadying at 4.9591%. The 2-year yield fell nearly 19 basis points. Markets no longer fully priced a December Fed rate rise, with its implied probability at 85%.
3. Oil and tech moves
Brent crude reached a five-month peak of $114 a barrel as Houthi attacks in Saudi Arabia raised concerns about energy supply disruption. Meta shares lost nearly 8% after the company posted its first cash outflow in more than a decade, citing AI-related spending, while Tesla shares fell 3.1% after it cut its 2026 capital spending plans.
