Global equities extended their slide on Tuesday as investors questioned the sustainability of lofty AI valuations and trimmed exposure to risk assets. Losses were broad across the US, Europe, and Asia, while Bitcoin’s brief fall below $90,000 underscored the market’s reduced appetite for risk.
US stocks fell again on Tuesday as weakness in technology and cryptocurrency markets deepened, weighing on risk appetite. The DOW dropped -0.6%, the S&P 500 lost -0.3%, and the NASDAQ slid -0.6% as investors grew wary of stretched AI valuations and fading optimism for rate cuts. Nvidia (-1.6%), Amazon (-3.8%), and Microsoft (-3.0%) declined, despite AI start-up Anthropic announcing a US$30 billion partnership with Microsoft and new investments from both Microsoft and Nvidia. Home Depot (-4.0%) also dragged on the DOW after cutting its full-year profit outlook, while Cloudflare slipped -1.6% following a major network outage. Bitcoin briefly fell below $90,000, reflecting reduced risk-taking as investors pulled nearly US$900 million from crypto funds. Updated ADP data showed private employers cut 2,500 jobs on average over the past four weeks, suggesting a cooling labour market ahead of the September jobs report. US Treasury yields edged lower as investors sought safety in bonds, with the US two-year yield losing -2bp to 3.591%, and the 10-year yield remaining unchanged at 4.131%.
European stocks tumbled on Tuesday, tracking a global sell-off sparked by renewed concerns over AI-linked valuations and fading hopes for near-term rate cuts. The STOXX 600 dropped -1.8%, with all major sectors finishing in negative territory. Germany’s DAX fell -1.8%, France’s CAC 40 lost -1.9%, and the UK’s FTSE 100 declined -1.3% as investors awaited delayed US jobs data and Nvidia’s upcoming earnings for direction. Swiss drugmaker Roche (+6.8%) bucked the trend after strong Phase III trial results for its new breast cancer treatment, while Novo Nordisk (-2.5%) slipped after accelerating US price cuts for Wegovy.
Asian equities slumped on Tuesday as investor caution intensified ahead of Nvidia’s earnings and the delayed US jobs report. China’s Shanghai Composite fell -0.8%, and Hong Kong’s Hang Seng dropped -0.8%, pressured by tech weakness and escalating diplomatic tensions with Japan. Japan’s Nikkei 225 plunged -3.2%—its steepest fall in over seven months—as tourism stocks slumped following China’s travel warning, while the yen strengthened on intervention concerns after Bank of Japan Governor Kazuo Ueda met with Prime Minister Sanae Takaichi. South Korea’s Kospi sank -3.3% as institutional and foreign selling hit chipmakers, with Samsung Electronics (-4.4%) and SK Hynix (-5.9%) leading losses. Australia’s ASX 200 tumbled -1.9% to a five-month low after RBA minutes dampened rate-cut hopes, with Technology One plunging -17.2% on weak FY25 results and James Hardie Industries surging +9.9% on an upbeat earnings upgrade. New Zealand’s NZX 50 slipped -1.2% amid the global risk-off mood.
WTI crude rose +1.4% to US$61.5/bbl; gold increased +0.8% to US$4,078.4/oz; and iron ore inched up +0.5% to US$104.42/MT.