Global stock markets resumed their downward trend on Tuesday as technology shares came under renewed pressure and investors reduced exposure ahead of a key US inflation report.
MSCI’s Asia Pacific equities index fell 2.5%, marking its fourth decline in five sessions, as a broad rotation out of tech stocks weighed on regional markets.
South Korea’s Kospi index led losses in the region, plunging 6.3% as semiconductor and artificial intelligence-related stocks retreated following a strong rally that had previously driven the benchmark to global highs this year.
US equity futures also reflected the negative sentiment, with contracts tied to the tech-heavy Nasdaq 100 slipping 0.8% after a volatile trading session on Wall Street. European markets were similarly positioned for a weaker open.
In commodities, gold fell 2% to trade below $4,200 an ounce as investors adjusted expectations around interest rates. Market sentiment was shaped by speculation that persistently high inflation could push the US Federal Reserve toward maintaining higher interest rates for longer, reducing demand for non-yielding assets like gold.
Bond markets also weakened, with the yield on the US 10-year Treasury note rising two basis points to 4.54%, reflecting cautious sentiment ahead of the inflation release.
Oil prices, however, partially recovered from earlier losses, with Brent crude trading near $92 a barrel. The rebound came amid renewed geopolitical tensions following US military actions in Iran, which added a risk premium to energy markets.
Analysts say markets are currently being driven by a combination of macroeconomic uncertainty and geopolitical risk, with investors balancing concerns over inflation, interest rates, and escalating tensions in the Middle East.
The latest moves highlight growing volatility across global asset classes as traders position themselves for potentially significant shifts in monetary policy and geopolitical conditions.
