Asia Markets Face Declines as Tech Rout Shakes Wall Street, Oil Surges
Market Overview and Key Developments
Wall Street Tech Selloff Impacts Asian Markets
SINGAPORE, June 8 (Reuters) - Asian markets were poised to fall on Monday after Wall Street's nine-week winning streak ended in heavy tech selling, while Israeli strikes on Beirut sent oil and the dollar higher.
Futures and Friday's U.S. exchange-traded fund moves pointed to sharp drops in Japan and South Korea and S&P 500 futures were down 0.2% in early Asia trade.
Semiconductor Stocks and Federal Reserve Expectations
The Nasdaq had dropped 4.2% on Friday, with selling concentrated in semiconductor stocks after a hot jobs report ramped up expectations for Federal Reserve interest rate hikes, slamming the brakes on what has been a sparkling AI-led rally.
Two-year Treasury yields rose more than 11 basis points on Friday and benchmark 10-year Treasury futures were about five ticks lower early on Monday morning in Asia.
Market Sentiment and Analyst Commentary
"The AI-drives-everything narrative frayed last week," said Bob Savage, head of markets macro strategy at BNY.
"Whether this is a healthy pause in the nine-week equity rally or a top remains the key question. The IPO focus on SpaceX and Anthropic is part of the pause – whether to make room for the new market cap or to rethink value."
Upcoming Events and Economic Indicators
The week ahead is headlined by the giant SpaceX listing, expected to price on Thursday and trade on Friday, but will also have inflation in focus with U.S. consumer price data due on Wednesday and central bank meetings in Canada and Europe.
Cryptocurrency Movements
Last week, bitcoin notched its heaviest weekly drop since the collapse of crypto exchange FTX in late 2022, falling about 16%. It was hovering just shy of $63,000 on Monday.
IPO Pipeline and Market Liquidity Concerns
SpaceX's debut is expected to be followed by other mega IPOs in the coming months from Anthropic and OpenAI, raising so much money that brokers are nervous it could draw down other assets.
Geopolitical Tensions and Commodity Markets
Oil Prices Surge Amid Mideast Escalation
The Mideast situation also remains delicate, and Brent crude futures were up about 2.6% to $95.45 a barrel on Monday morning after an Israeli attack on Beirut prompted Iran to direct a salvo of missiles at Israeli targets.
OPEC+ agreed on Sunday to the fourth increase in its oil output targets in as many months.
Currency Market Movements
In currency trade the dollar was firm and holding above 160 yen and pushed the Australian dollar to $0.7038. The euro hovered at $1.1518.
(Editing by Aurora Ellis)
