Asian markets extended their losses on Tuesday, mirroring Wall Street’s decline as investors positioned themselves ahead of key U.S. jobs and inflation data releases. The tech sector, which has driven market gains this year, is now a source of concern because of worries over a potential bubble. Investors are questioning the massive investments in artificial intelligence and the implications of a possible Federal Reserve pause on interest‑rate cuts.
U.S. jobs data for November, along with the delayed October figures, are set to be released later in the day, followed by the consumer‑price index on Thursday. These readings will be closely scrutinized for insight into the Fed’s plans for borrowing costs, as officials debate whether to continue lowering rates in January. Recent comments from decision‑makers indicate a split within the policy board: some warn that rates are still too high, while others believe they are at the right level. According to Matt Weller, head of market research at City Index, “After essentially missing the October jobs report due to a lack of survey data, the Fed will closely scrutinize the November figures when setting out the path of monetary policy through early 2026.”
Traders are currently pricing only a one‑in‑four chance of another rate cut in January, which may limit market reaction unless the labor data show a significant deterioration. Consequently, equity traders have turned sellers, with Tokyo, Hong Kong, Shanghai, Seoul and Taipei all losing more than 1% on Tuesday. Sydney, Singapore and Jakarta also fell, while worries over the tech sector weighed on sentiment. Recent warnings about an AI‑fuelled bubble, compounded by weak earnings from Oracle and Broadcom, have contributed to the decline.
The downbeat mood in equity markets has spilled over into the crypto sphere, with Bitcoin slipping to $85,171, while gold moved back above $4,300. The yen held gains against the dollar ahead of an expected rate hike by the Bank of Japan on Friday. As investors await the key U.S. data releases, the global market remains subdued, with all eyes on the potential implications for interest rates and the tech sector.
Key figures at 02:30 GMT included the Tokyo Nikkei 225 down 1.3% at 49,523.56, the Hong Kong Hang Seng Index down 1.7% at 25,205.57, and the Shanghai Composite down 1.1% at 3,825.00. The euro/dollar was up at $1.1754, the dollar/yen down at 154.90 yen, the pound/dollar down at $1.3370, and the euro/pound up at 87.92 pence. West Texas Intermediate crude fell 0.3% to $56.64 per barrel, and Brent North Sea crude dropped 0.4% to $60.35 per barrel.
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