Global stock markets fell on October 13 as renewed concerns about competition in the artificial intelligence sector hit chipmakers, prompting investors to seek safety in government bonds. Asian technology stocks led the sell-off, while investors awaited US inflation data and quarterly earnings from major banks.
The MSCI world stocks index slipped 0.14%, while its broadest index of Asia-Pacific shares outside Japan fell more than 2% to its lowest level since late July.
South Korea’s KOSPI, a key market in the global AI industry, plunged more than 5%, marking its sharpest one-day fall since mid-August. Samsung shares dropped 7.4%, while SK Hynix declined 10%. Taiwan’s TSMC fell 1.8%, and SoftBank, a major AI investor, lost 8%.
The sell-off followed reports of progress by Chinese memory chipmaker CXMT, raising concerns about stronger competition from Chinese AI companies. Broadcom CEO Hock Tan also compared some investment flows into the broader AI sector to casino gambling, adding to investor unease.
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US NASDAQ futures declined 0.5%. Micron Technology fell 2.5% in premarket trading, while NVIDIA slipped 0.6%.
European markets moved in the opposite direction. The pan-European STOXX 600 rose 0.5% to a one-week high, supported by lower oil prices and the region’s relatively limited exposure to technology stocks.
Julien Lafargue, chief market strategist at Barclays Private Bank, said investors were being reminded of the memory chip industry’s cyclical nature. He also said competition could intensify sooner than expected.
The benchmark US 10-year Treasury yield dipped to 5.193%, moving away from the 24-year high of 5.364% recorded the previous week.
Elevated energy prices and concerns about rising government debt have fueled bond-market volatility in recent weeks, pushing borrowing costs to multi-decade highs across several markets.
Investors awaited US inflation data due Wednesday for clues about the Federal Reserve’s next policy decision. Markets priced in an 80.6% chance that the central bank will hold interest rates steady later this month, up from 51% a month earlier, according to the CME FedWatch tool.
Investors were also watching quarterly results from major US lenders to assess how higher Treasury yields could affect lending growth, dealmaking and funding costs. JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo were scheduled to report results later on Tuesday.
Brent crude futures fell 1.7% to USD 104.78 per barrel as traders weighed supply risks following attacks on Saudi Arabia against the possibility of additional diesel supplies from Russia.
The US dollar eased from 18-month highs, while bond yields and oil prices fell. The euro traded at USD 1.1182, while the Japanese yen stood at 157.97 per dollar.