Asian shares wobble as tech rout boosts bonds, dents rate hike bets

NASDAQ: The Nasdaq is a major US stock exchange and its associated composite index, heavily weighted toward technology and growth-oriented companies. In the reported news, the Nasdaq slumped more than 2% overnight amid rising concerns over AI spending and potential economic impacts. Charlie McElligott of Nomura highlighted the pressure on AI-related investments affecting market sentiment. Treasuries: US Treasuries are government-issued bonds that serve as key benchmarks for fixed-income markets and safe-haven assets. According to the report, Treasuries experienced their best daily performance in more than three years as investors fled equities amid AI bubble fears, driving yields lower across the curve. Analysts noted renewed hedging properties of these bonds in the face of potential growth scares. Chris Weston: Chris Weston is head of research at Pepperstone. He is quoted in the news discussing the emotional dynamics of falling markets, noting that sellers do not need fresh catalysts when deteriorating price action encourages further selling, in relation to the tech-driven equity declines. Federal Reserve: The Federal Reserve is the central bank of the United States, responsible for setting monetary policy including interest rates. The news indicates markets sharply reduced expectations for further rate hikes by the Federal Reserve, with a December increase no longer fully priced in due to growth concerns from AI developments. This repricing occurred alongside broader risk-off moves in equities. Charlie McElligott: Charlie McElligott is managing director for cross-asset strategy at Nomura Securities International in New York. In the context of this news, he commented that AI is under pressure and that US Treasury bonds are functioning again as a hedge amid real-time repricing of US growth probabilities tied to AI reset concerns. Safe-Haven Demand: Investors are shifting toward government bonds and certain currencies as hedges during periods of equity market volatility driven by technology sector news. AI Investment Concerns: Growing fears of an AI bubble are prompting scrutiny of massive data-center spending and its potential to affect broader economic activity. Monetary Policy Outlook: Markets have reduced expectations for near-term Federal Reserve rate tightening amid signs of possible economic slowdown linked to technology sector developments.