Chip Stocks Plunge & Treasuries Rally - Asia Market Wrap

Global stocks extended losses as a sharp selloff in chip shares deepened concerns over the sustainability of the AI rally. MSCI's Asia Pacific Index fell 2.8%, heading for its lowest close since July, while Nasdaq 100 futures dropped 0.9%. European stock futures pointed to a decline of around 1% at the open. South Korea's Kospi plunged as much as 8%, triggering a brief trading halt, with Samsung and SK Hynix both falling more than 10%. The rout followed losses in US chip stocks as investors questioned whether the billions invested in AI would generate sufficient returns, prompting a shift toward safer assets. Treasuries rallied as demand for haven assets increased, with 10-year yields falling 8 bps to 5.11% and two-year yields declining 7 bps to 4.72%. The Dollar weakened as investors reassessed the outlook for Fed policy following the fastest US inflation in five months, which had previously raised expectations for further rate hikes. Elevated oil prices amid the Middle East conflict added to inflation concerns and the prospect of more aggressive central-bank tightening. Attention now turns to Fed Chair Warsh's remarks in Bangkok on Friday, as markets assess the outlook for rates