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July 3, 2026 - 02:44
5 minutes
(Bloomberg) — Asian stocks fell, putting the regional benchmark on track for a second straight weekly decline as concerns mounted that the artificial intelligence-fueled rally has run ahead of itself.Gauges in Japan and South Korea retreated, sending the broader MSCI Asia Pacific Index down 0.4%. The moves came after the tech-heavy Nasdaq 100 Index fell 1.6%, and a gauge of US chip stocks tumbled over 5%.South Korea’s Kospi Index, the world’s best-performing major benchmark this year, dropped 0.8%, with SK Hynix Inc among the losers.Elsewhere, Treasuries ended the holiday-shortened week with lower short-term yields after June employment data and lower oil prices challenged expectations for Federal Reserve rate hikes this year. There will be no cash trading in Treasuries on Friday due to a US holiday. The dollar edged higher in early Asian trading, recouping some of its losses from the New York session.Technology shares extended their decline, with chipmakers leading losses as concerns grew that the AI-driven rally may have gone too far, too fast. While confidence in the technology’s long-term potential remains strong, investors are increasingly questioning whether sky-high valuations can keep pace with rising spending and a more crowded market.“There are concerns that the high memory prices will bring AI solutions that need less memory, and that the data center build-out may not all get built in the end,” said Louis Navellier of Navellier & Associates. “And that token pricing of AI software will push users to lower-cost versions, especially Chinese offerings, and is bringing increased caution regarding the enthusiasm for all things AI.”In other corners of the market, American crude slipped early Friday as tanker traffic through the Strait of Hormuz increased further, adding to a gush of near-term supply while talks between the US and Iran continue. The commodity traded just under $68.50 a barrel.Gold held its gains from the New York session as the weak US jobs numbers eased rate-hike bets. The non-yielding metal, which is less attractive when rates are increased, traded around $4,125 an ounce.The yen gave up some of its gains from the previous session to trade near 161.40 to the greenback.Earlier, the S&P 500 and Nasdaq 100 received a boost after data showed the labor market cooled in June, reinforcing expectations the Fed can afford to be patient on interest rates.Nonfarm payrolls increased 57,000 last month after downward revisions to the prior two months took some of the shine off recent blockbuster reports, Bureau of Labor Statistics data Thursday showed. The unemployment rate fell to 4.2% as labor force participation plunged.Traders pared back expectations for additional Fed rate hikes, though they continued to price in at least one increase this year.“A labor market that is still expanding, but no longer overheating, allows the Fed to remain patient while assessing price pressures,” said Andrew Dubinsky at UBS Chief Investment Office. “If disinflation continues as expected, policymakers will have little reason to move away from a holding pattern in the second half of the year.”Corporate Highlights:Tesla Inc.’s vehicle sales beat Wall Street’s modest expectations by a wide margin. SoftBank Group Corp. and its telecom unit will start renting AI computing resources to US companies next fiscal year. Rivian Automotive Inc. raised its full-year sales outlook in a promising sign as the maker of electric vehicles begins deliveries of its lower-cost SUV seen as critical to the company’s future. Adani Enterprises Ltd. is seeking to raise as much as 100 billion rupees ($1 billion) through a sale of shares to institutional investors, terms showed. Some of the main moves in markets:StocksS&P 500 futures were little changed as of 9:42 a.m. Tokyo time Hang Seng futures were little changed Japan’s Topix was little changed Australia’s S&P/ASX 200 rose 0.7% Euro Stoxx 50 futures were little changed CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1422 The Japanese yen fell 0.2% to 161.43 per dollar The offshore yuan was little changed at 6.7893 per dollar The Australian dollar fell 0.1% to $0.6913 CryptocurrenciesBitcoin fell 0.4% to $61,261.31 Ether fell 0.4% to $1,697.79 BondsThe yield on 10-year Treasuries was unchanged at 4.48% Australia’s 10-year yield was little changed at 4.82% CommoditiesWest Texas Intermediate crude fell 0.4% to $68.42 a barrel Spot gold rose 0.4% to $4,137.48 an ounce This story was produced with the assistance of Bloomberg Automation.©2026 Bloomberg L.P.
