Global financial markets extended sharp losses Monday as concerns over high technology valuations and shifting US policy expectations triggered a broad sell-off in equities, oil, and precious metals.
The downturn followed a volatile end to last week and intensified after Microsoft’s announcement of increased spending on artificial intelligence infrastructure. That move reignited investor anxiety about the timeline for returns on massive tech investments, fueling fears of an overvalued sector. Major Asian tech-heavy indices led the declines, with Seoul’s KOSPI falling over 5%, dragged down by Samsung Electronics and SK Hynix. Tokyo’s Nikkei and Taiwan’s benchmark, home to firms like Sony and TSMC, also fell more than 1%. Markets in Hong Kong, Shanghai, Sydney, and Southeast Asia saw similar tumbles.
European bourses opened lower in response, while US stock futures pointed to further weakness after the Dow Jones Industrial Average closed down 0.4% on Friday.
Adding significant pressure was a surge in the US dollar, driven by former Federal Reserve governor Kevin Warsh’s nomination to lead the central bank. Traders view Warsh as relatively hawkish on inflation, raising expectations for tighter monetary policy. The stronger dollar made dollar-priced commodities more expensive for holders of other currencies. Gold, which had hit a record high above $2,300 per ounce last week, plummeted as much as 10% on Monday, extending Friday’s historic plunge. Silver saw equally severe losses.
Crude oil prices dropped more than 5% at one point, continuing a decline from Friday. The slide was attributed to easing geopolitical tensions after US President Donald Trump expressed optimism about reaching a deal with Iran, dampening immediate supply risk premiums.
In currency markets, the dollar strengthened against the euro and yen, while the British pound weakened.
The confluence of factors—persistent skepticism toward AI-driven tech valuations, a hawkish tilt in Federal Reserve leadership, and reduced geopolitical risk for oil—marks a sharp reversal from the risk-on sentiment that dominated markets in January. Analysts suggest the rapid ascent in asset prices has prompted a necessary correction, with the speed of the decline now itself a point of caution. The volatility underscores shifting investor focus from growth optimism to valuation sustainability and central bank policy paths.
