Asian stocks slide on doubts over AI profitability as KOSPI falls over 3.5%

what happened

Asian markets remain under heavy pressure as investors sell technology shares after their strong gains in recent months and move money into safer assets, including Treasuries and defensive currencies such as the yen. South Korea's KOSPI, a key gauge for the artificial intelligence sector, fell close to 3.5%, heading toward its weakest close since April, Bloomberg reported. Japan's Nikkei 225 and TOPIX each lost more than 1.5%.

The weakness spread to US equity futures, with Nasdaq 100 contracts down 0.1% after the index's toughest session since late June. The 10-year Treasury yield, which dropped 17 basis points on Thursday, traded at 4.96%. The yen gained 0.4% to 156.20 per dollar. Brent crude is trading just below $113 a barrel after rising 4% in the previous session on violence in Saudi Arabia. Gold extended Thursday's 2.8% loss.

why it matters

Doubts about whether AI investments will pay off over the long run are cutting tech valuations and beginning to shape broader macro views. Traders have also reduced their bets on another Federal Reserve rate hike this year, which matters for bond yields and the dollar.

market impact

Asian and US tech stocks: pressure from capital outflows; US Treasuries and the yen gain as safe havens

tags

instruments