Hong Kong – Asian markets extended losses on Tuesday, following Wall Street lower, as investors prepared for key U.S. jobs and inflation reports. Concerns over a possible tech bubble also weighed on sentiment.
After a strong tech-led rally earlier this year, traders appear cautious, questioning the huge investments in artificial intelligence and noting that the Federal Reserve may pause further interest rate cuts.
All eyes are on U.S. jobs data for November and the delayed October figures, coming out later in the day. These will be followed by the consumer price index report on Thursday. Investors are watching closely for clues on whether the Fed will continue lowering borrowing costs in January.
Recent Fed comments show a split among policymakers: Governor Stephen Miran said rates are still too high, New York Fed head John Williams believes they’re about right, and Boston Fed President Susan Collins called it a “close call.”
“After missing the October jobs report due to incomplete data, the Fed will scrutinize the November figures when setting policy for early 2026,” said Matt Weller, head of market research at City Index. “Traders are currently pricing in only a 25% chance of another rate cut next month, so markets may not react strongly unless the job numbers are weak.”
With limited chances of a rate cut, investors have turned cautious. Major Asian markets all fell over one percent:
- Tokyo Nikkei 225: down 1.3% to 49,523.56
- Hong Kong Hang Seng: down 1.7% to 25,205.57
- Shanghai Composite: down 1.1% to 3,825.00
- Seoul, Taipei, Sydney, Singapore, Jakarta: also lower
Tech sector concerns added to the downside. Worries about an AI-driven bubble intensified after disappointing earnings from Oracle and Broadcom. Analysts note that the massive AI investments may take time to deliver returns, and some debt-financed spending by tech giants is also a concern.
“Jitters over AI have resurfaced, especially after weak guidance from Broadcom and delays in Oracle’s data center projects,” said Michael Brown of Pepperstone.
The cautious mood also affected crypto and commodities: Bitcoin slipped to $85,171, while gold rose above $4,300, nearing record highs. The yen strengthened against the dollar ahead of an expected Bank of Japan rate hike on Friday.
Other key market moves:
- Euro/dollar: up to $1.1754
- Dollar/yen: down to 154.90
- Pound/dollar: down to $1.3370
- Euro/pound: up to 87.92 pence
- WTI crude: down 0.3% to $56.64 per barrel
- Brent crude: down 0.4% to $60.35 per barrel
- Dow: down 0.1% to 48,416.56
- FTSE 100: up 1.1% to 9,751.31
Investors remain cautious, waiting to see if the upcoming U.S. data will shift the Fed’s policy stance and provide clarity for markets heading into 2026.
