Asian stock markets declined following a significant drop in the US technology sector. The Nasdaq index fell by more than 2% amid investor concerns regarding the capital requirements for artificial intelligence development.
Meta Platforms shares dropped approximately 8% after the company reported its first cash outflow in over a decade. This performance triggered a shift in investor sentiment, leading to the largest single-day rally in US Treasuries in more than three years.
The yield on 10-year US Treasury bonds decreased by 19 basis points to approximately 4.96%. Consequently, traders reduced their expectations for Federal Reserve rate hikes, removing nearly a full quarter-point increase from pricing for the coming year.
The probability of a rate hike in December is now estimated at 85%. Regional indices reflected the trend: the MSCI Asia-Pacific index fell 0.3%, Japan's Nikkei dropped 1.3%, and South Korea's KOSPI declined 1.7%.
While technology stocks faced pressure, oil prices reached a five-month high. Brent crude traded between $110 and $113 per barrel, driven by supply concerns in the Middle East.
