Asian stock markets may face downward pressure after a risk-averse session in the US, with the technology sector experiencing significant declines, notably affecting the Nasdaq‘s performance. The situation worsened due to particular challenges encountered by leading tech firms such as Apple, Tesla, and AMD. Apple’s shares took a hit from unsatisfactory iPhone sales in China, while AMD faced setbacks due to new U.S. regulations limiting its semiconductor exports to China. Meanwhile, gold reached unprecedented heights, surpassing $2,140 per ounce, though it slightly retreated as the session concluded. The dynamics of gold prices are crucial to monitor, especially as US bond yields decrease and geopolitical tensions arise, highlighted by China’s 7.2% increase in military spending and its firm stance against Taiwan’s independence movements.
On a macro front, worries about China’s economic health could continue to impact the technology sector, especially as the excitement from the earnings season fades. China’s set 5% GDP growth target has raised eyebrows regarding the sufficiency of its proposed fiscal measures, contributing to a dip in oil prices due to doubts about achieving these economic goals. Market participants are now focusing on forthcoming economic data and policy announcements, such as the US ADP employment figures, JOLTS data, and Federal Reserve Chair Powell’s congressional testimony. There is a general anticipation of dovish outcomes, which could lead to a further decline in bond yields and a softer US dollar, with particular attention paid to Powell’s remarks for any dovish signals ahead of Friday’s US employment report.
