Asian stocks decline as traders retreat from tech

Market Overview - Shares in Japan and Australia declined, with equity futures for Hong Kong also dropping. The Nasdaq 100 fell by 1.9%, and Nvidia Corp. decreased by 3.8%, reaching its lowest point since September. The S&P 500 dropped 1.2%, breaching its 50-day moving average, marking levels not seen in three weeks [1][11]. Technology Sector - Heavy selling in the tech sector indicates that investors are questioning the sustainability of high valuations and ambitious spending by companies leading the AI boom. Concerns are growing regarding the costs and viability of data center expansions, such as Oracle Corp.'s financing plans in Michigan. Jack Ablin from Cresset Capital Management noted that while AI remains a key investment theme, signs of fatigue are emerging, with elevated sector valuations and unprecedented infrastructure spending [3][12]. Commodities - Gold and silver prices surged, with silver achieving one of its best daily gains of the year. Oil prices rebounded from recent lows amid rising geopolitical risks involving Russia and Venezuela. These sharp movements across asset classes suggest that traders may face a busy holiday season, where thin liquidity could amplify market fluctuations [7][12]. Economic Indicators - Traders are preparing for the upcoming US inflation reading, although skepticism exists regarding the reliability of the consumer price index due to potential disruptions from government shutdowns. In Asia, the yen appreciated slightly, with expectations that the Bank of Japan will raise interest rates to the highest level in three decades [9][12]. Regional Developments - New Zealand's economy showed a stronger-than-expected rebound in the third quarter, driven by falling interest rates following a contraction in the second quarter. Meanwhile, China Vanke Co., once the largest homebuilder in the nation, is approaching one of the largest debt restructurings in the country's history [10][12].