Major stock markets across Asia witnessed a significant sell-off on Tuesday, echoing a downturn on Wall Street as global investors turned cautious. The prevailing mood is one of apprehension ahead of the release of crucial US employment and inflation statistics, which are expected to heavily influence the Federal Reserve's future monetary policy path. Adding to the risk-off sentiment are growing whispers of a potential bubble in the high-flying technology sector.
Market Bloodbath: Key Indices in the Red
The declines were broad-based and pronounced. Hong Kong's Hang Seng Index (HSI) was trading at 25,139, down a steep 489 points or 1.91%. Japan's benchmark Nikkei 225 trimmed 673 points or 1.34% to settle at 49,494. Mainland Chinese markets also felt the pressure, with the Shanghai and Shenzhen composites falling 1.22% and 1.88%, respectively. South Korea's Kospi dipped 73 points to trade at 4,016 around 10:05 AM Indian Standard Time (IST).
This pullback marks a slowdown from the strong, technology-led rally that characterized much of the year. Traders are now adopting a wait-and-see approach. This hesitation stems from massive investments flowing into artificial intelligence (AI) companies and emerging signals that the US Federal Reserve might pause its cycle of interest rate cuts.
All Eyes on US Data and Divided Fed Voices
The immediate spotlight is firmly on the US November jobs report, along with delayed October data, scheduled for release later today. Financial analysts globally are scrutinizing these numbers. They believe the employment figures, followed by Thursday's Consumer Price Index (CPI) report, will provide critical insight into the Fed's plans for interest rates in early 2026.
Interestingly, there appears to be a division among Federal Reserve officials regarding the current policy stance. Governor Stephen Miran, an appointee of former President Donald Trump, stated that interest rates are still too high. In contrast, New York Fed President John Williams described them as being "about the right place." Meanwhile, Boston Fed President Susan Collins characterized the upcoming policy decision as a "close call," according to an AFP report.
Cryptocurrencies Tumble, Gold Shines as Safe Haven
The risk-averse sentiment extended beyond traditional equity markets into the cryptocurrency space. The price of Bitcoin dropped to $85,171, reflecting a flight from speculative assets. Conversely, gold continued to exert its safe-haven charm, rising above the $4,300 per ounce level and nearing its record highs. In currency markets, the Japanese yen gained strength against the US dollar ahead of the Bank of Japan's widely anticipated interest rate hike this Friday.
The collective market movement underscores a period of high uncertainty and recalibration. Investors are digesting the implications of stretched valuations in tech, the future trajectory of US monetary policy, and shifting capital flows into traditional safe assets like gold.
