Oil Above $100, Stock Slide Continues Due to AI Fears – Asia Market Wrap
Global markets came under heavy pressure as a selloff in technology stocks accelerated, with investors questioning whether massive AI spending will generate sufficient returns. MSCI’s Asia Pacific Index fell 2.2% after the S&P 500 posted its biggest one-day decline in a month. Samsung and SK Hynix both slumped more than 7%, while Nasdaq 100 futures pointed to further weakness.
The decline was compounded by another surge in oil prices, with Brent hovering around $100 a barrel after briefly moving above that level. Escalating tensions in the Middle East, including Houthi attacks on tankers in the Red Sea and Trump’s threat to expand US strikes on Iran, have fueled fears of prolonged supply disruptions. Brent has now surged roughly 38% this month, reviving concerns that inflation could remain stubbornly high.
Higher energy prices continued to pressure bond markets, with government debt across Japan, Australia and New Zealand declining alongside US Treasuries. The US 10-year Treasury yield climbed to 4.71% as traders increased expectations that central banks may need to keep interest rates higher for longer. Gold fell to around $4,025 an ounce as rising yields reduced the appeal of non-yielding assets.
Investors are also increasingly concerned that depleted global oil inventories could leave markets vulnerable to a supply squeeze if geopolitical tensions intensify further, raising the risk of slower global growth alongside persistent inflation.
On the trade front, the US announced tariffs of between 10% and 12.5% on imports from most major trading partners, marking the latest step in Trump’s efforts to rebuild his tariff regime after previous measures were weakened by the Supreme Court.
