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(Bloomberg) — Stocks resumed their slide as technology shares remained under pressure and investors trimmed positions ahead of a key inflation reading in the US. Gold dropped.
MSCI’s gauge of Asia Pacific equities dropped 1.6%, heading for its fourth loss in five days, as investors rotated out of tech stocks. South Korea’s Kospi, a barometer of artificial intelligence investment, led regional losses, tumbling more than 4% as chipmakers retreated following a scorching advance that had propelled the benchmark to the top of global rankings this year.
Gold dropped about 2% to trade below $4,200 an ounce on expectations quicker inflation will prompt the Federal Reserve to raise interest rates and weigh on non-interest-bearing assets. Bonds fell, with the Treasury 10-year yield rising two basis points to 4.53%. Oil pared Tuesday’s losses with Brent crude trading around $92 a barrel as tensions flared following US attacks on Iran.
Volatility is rising across markets as traders grapple with a growing list of risks: stretched tech stock valuations, escalating Middle-East tensions and mounting expectations that the Fed will need to raise rates to combat faster inflation. Eyes now turn to Wednesday’s US inflation report, which may provide the clearest signal yet whether new Fed Chair Kevin Warsh will need to keep rates higher for longer.
