US markets extended losses as rising oil prices and a sharp sell-off in tech stocks weighed on sentiment , overshadowing dovish signals from the Federal Reserve. Key Market Moves S&P 500 fell 0.4% to 6,343.72 Nasdaq dropped 0.7% to 20,794.64 Dow Jones rose 0.1% to 45,216.14 Key takeaway: Tech weakness and oil-driven inflation fears are dragging the broader market lower. What’s Driving the Sell-Off? 1. Oil Prices Surge Again Crude oil jumped over 5% to around US$105 Driven by ongoing US–Iran–Israel conflict Higher oil = higher inflation risk = pressure on equities 2. Tech Stocks Lead the Decline Heavy losses in AI, chip, and data-related names: Applied Digital : -13.5% AXT Inc : -13% Micron Technology : -9.9% Arm Holdings : -5% Intel : -4.5% Super Micro Computer : -4.1% AI and semiconductor stocks are facing profit-taking and valuation concerns 3. Fed Comments Not Enough to Lift Sentiment Jerome Powell signaled no immediate rate hikes despite rising energy pri...
KUALA LUMPUR (Oct 5): The FBM KLCI closed down 12.96 points or 0.72% today after local institutional investors took profit and as higher US government bond or Treasury yields at above 3% hit Asian financial markets.
It was reported that US Treasury yields surged to a fresh seven-year high as strong US economic data led to anticipation of faster-than-expected interest rate rise there.
At Bursa Malaysia, the KLCI settled at 1,777.15 points at 5pm after falling to its intraday low at 1,776.52 points.
Inter-Pacific Securities Sdn Bhd research head Pong Teng Siew told theedgemarkets.com that "the negative market performance today could be due to profit-taking by local funds and increase in US bond yields".
Across Bursa Malaysia, the biggest decliners included KLCI-linked stocks Nestle (M) Bhd, Petronas Dagangan Bhd, Petronas Gas Bhd, Axiata Group Bhd and Hong Leong Financial Group Bhd.
Asian stock markets slipped. Japan's Nikkei 225 dropped 0.8%, South Korea's Kospi fell 0.31% while Hong Kong’s Hang Seng was down 0.19%.
Bloomberg reported that Asian stock markets rounded out a tough week with modest declines amid some signs of market stabilisation following this week’s surge in bond yields. Treasuries steadied and the dollar held gains for the week as traders turned their focus to US employment data Friday.
“Investors will keep a close eye on Friday’s monthly US payrolls report after the sell-off in bonds that’s been in part triggered by data underscoring the strength of the American economy. Federal Reserve Chairman Jerome Powell also stoked the surge in yields this week when he said the central bank could eventually boost its benchmark past the neutral level,” Bloomberg reported.
Source: The Edge
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