Asian stocks hit two-month low on AI jitters as bonds find favor
SPY•Asian stocks fell to a more than two-month low, with the regional index down over 2% as chipmakers led losses amid concerns about AI competition. Investors turned to government bonds, while the 10-year U.S. Treasury yield slipped 5 basis points to 5.193%.
1. Chip stocks lead losses
Asian stocks slid on Tuesday after a selloff in U.S. semiconductor shares prompted investors to reassess the AI trade. Samsung fell 8%, SK Hynix dropped 10%, and TSMC declined 1.8%; South Korea’s KOSPI sank more than 6%, its sharpest one-day drop since July. The selloff followed reports of rapid progress by Chinese memory maker CXMT.
2. Investors seek bonds
The 10-year Treasury yield fell 5 basis points to 5.193%, moving away from last week’s 24-year high of 5.364%. Investors were awaiting U.S. inflation data on Wednesday; markets priced an 80.6% chance that the Federal Reserve would hold rates steady later in the month, up from 51% a month earlier.
3. Bank results in focus
Investors were also watching U.S. bank earnings for signs of how higher Treasury yields are affecting dealmaking, lending growth and funding costs. JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo were due to report results later Tuesday. Brent crude traded at $105.90 a barrel, near a two-week high.
