Asian stocks dive on AI jitters ahead of US bank earnings
SPY•Asian stocks fell sharply, led by a 6% drop in South Korea’s KOSPI, as worries about AI competition and Middle East conflict weighed on sentiment. Investors awaited US bank earnings and inflation data, while Brent crude traded at $105.90 a barrel.
1. Asian shares slide
Asian stocks fell sharply on Tuesday after a Wall Street semiconductor selloff and concerns about competition in AI. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 2.4% to a two-month low; South Korea’s KOSPI sank 6%, triggering a five-minute halt in program trading, while Japan’s Nikkei fell 2.6% and Taiwan stocks lost 2%.
2. Oil and yields in focus
Brent crude futures traded at $105.90 a barrel, near a two-week high, as investors weighed geopolitical developments in the Middle East and Russia-Ukraine. The US dollar remained near an 18-month high. The 10-year US Treasury yield fell 4.8 basis points to 5.195% in Asian hours, after reaching 5.364% the previous week.
3. Bank earnings ahead
Investors were watching results from JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo for indications of how higher Treasury yields are affecting lending, dealmaking and funding costs. US inflation data due Wednesday will also be in focus; traders priced an 80.6% chance that the Federal Reserve would hold rates steady later in the month, up from 51% a month earlier.
