Global Markets Tumble as AI and Crypto Selloff Deepens

Broad Market Selloff Intensifies

A widespread selloff hit global markets, with significant losses across Asian equities, precious metals, and cryptocurrencies. The downturn follows a sharp decline on Wall Street, fueled by concerns over the AI sector's profitability and unsettling US labor market data.

Global Market Performance

MSCI's Asia-Pacific index excluding Japan dropped 0.9%, while South Korea's Kospi fell 5%, leading to a temporary trading halt. In the US, S&P 500 and Nasdaq futures declined by 0.6% and 1.1% respectively, indicating continued negative sentiment.

Economic and Market Impact

The selloff reflects waning investor confidence in key growth drivers like AI and crypto. Silver was hit particularly hard, plunging 8.9%, while gold fell 1.6%. The cryptocurrency market saw Bitcoin drop 3% and Ether fall 1.8%, extending recent losses. Concerns are amplified by a surge in US layoffs, which reached a 17-year high for January.

Outlook

Market analysts suggest the potential for a 'deeper unwind' as investors re-evaluate their positions in previously high-performing assets. The convergence of tech profit fears and negative economic indicators points to continued volatility ahead.

FAQ

Q: What triggered the market selloff?
A: The selloff was triggered by fears that new AI models could reduce software profits, coupled with a report showing US corporate layoffs surged to a 17-year high in January.

Q: Which assets were most affected?
A: Asian stocks, particularly the South Korean Kospi, US tech futures, precious metals like silver, and major cryptocurrencies including Bitcoin and Ether saw significant declines.

Source: Investing.com