Asian stocks fell on Friday as traders sharply reduced bets on a December rate cut by the Federal Reserve, triggering broad risk aversion and a steep selloff in technology shares.
Wall Street tech stocks tumbled overnight amid growing concerns that artificial intelligence valuations have overheated. According to CME FedWatch data, the probability of a December rate cut dropped to 45.8%, down from more than 60% earlier in the week.
Technology shares led losses across the region. South Korea’s KOSPI fell 2.5%, Japan’s Nikkei 225 slid 1.6%, and Hong Kong’s Hang Seng Index dropped 0.7%. Despite upbeat earnings from Tencent and JD.com, investors shifted focus to stretched valuations.
AI-related stocks were hit hard following declines in Nvidia and TSMC on Wall Street. SoftBank slumped 5.7%, SK Hynix plunged 6.2%, and Samsung Electronics lost nearly 4%.
Mainland Chinese markets were relatively resilient, with the CSI 300 falling just 0.4%, even as weak industrial production and fixed-asset investment data underscored lingering economic headwinds.
Elsewhere, Australia’s S&P/ASX 200 fell 1.3% as strong employment data reduced expectations for near-term RBA rate cuts, while Singapore’s Straits Times Index lost 0.6%. India’s Nifty 50 futures inched up 0.2%.
U.S. S&P 500 futures rose 0.2%, attempting to stabilize after one of the worst weeks for tech stocks in months. Reports suggesting additional U.S. tariff exemptions also provided modest relief to sentiment.