This week has seen considerable rotation in the markets, with technology stocks experiencing steep declines, particularly Meta and the semiconductor sector, leading to the Nasdaq's worst performance since June. This sell-off has prompted investors to turn to safe-haven assets, as evidenced by the 10-year U.S.
Treasury yield dropping below 5% for the first time in a month, marking the largest one-day decline since March 2023. Analysts note that Treasurys are being viewed as a refuge due to concerns over AI-related bond issuance. The trend is also reflected in Asia, where Japanese sovereign bonds and the Yen have surged amid similar demand for safe assets.
Economic indicators, such as Japan's core inflation reaching its highest level this year, may lead to potential rate hikes by the Bank of Japan. In corporate news, Volvo Car shares plummeted by 30% after reporting a quarterly loss attributed to weak demand in the U.S. and China, while SK Hynix's shares rebounded after it canceled IPO plans for its U.S. unit, Solidigm.
Apple, however, has bucked the trend with gains, aided by the launch of its new $2000 iPhone Duo. Additionally, OpenAI is nearing a funding round that could value it at $1.25 trillion, down from a previous $1.4 trillion valuation.
The article also touches on geopolitical developments, including President Trump's request to restore SpaceX's Starlink for Ukraine, and notes a trend of wealthy Chinese individuals moving their assets to U.S. banks amid tightening regulations in China