Headline: Cross-Asset Jitters: AI-led Gains Face Strain as Bitcoin Slides and Asia Stocks Retreat
Global markets turned choppy as investors weighed concentrated gains in AI equities against mounting geopolitical and macroeconomic risks. A wave of risk-off moves—spanning equities, crypto, commodities, and Asia-Pacific markets—highlights how sensitive sentiment has become to supply constraints, earnings catalysts, and policy uncertainty.
Scrutiny over roughly $200 billion of Chinese investment tied to US technology and infrastructure has raised national security concerns, prompting traders to factor in higher geopolitical risk premiums. Meanwhile, AI-linked names continue to dominate equity performance, accounting for about three-quarters of the S&P 500’s year-to-date return. Still, supply chain bottlenecks are producing a “backlog paradox”—strong demand but constrained delivery—while index valuations hover near 27x forward earnings, well below the dot-com era’s 50x, yet rich enough to keep eyes on a pivotal earnings print from a leading AI chipmaker.
Risk appetite faltered across other asset classes. Bitcoin broke below $90,000 as fear gauges touched extreme levels, with technicians watching support near $86,000; a steadier pattern of ETF flows could set the stage for a short-covering bounce. Asian equities slid more than 3% amid AI stock volatility, ahead of key US labor data and rising bond yields that continue to pressure growth valuations. In commodities, oil fell under $64 a barrel, with WTI near $59, as surplus concerns clashed with ongoing sanctions on Russia—leaving traders alert to supply headlines and geopolitical flare-ups.
Selective pockets of strength remained. China’s purchase of roughly one million tons of US soybeans lifted prices by over 3%, reviving optimism for a market long impacted by trade tensions. In smartphones, Apple’s iPhone 17 reportedly captured a 37% sales jump in China, lifting its market share to around 25%—though an upcoming flagship release from a domestic rival could reshape the competitive landscape.
Key Points: – Chinese investment in US tech and infrastructure faces heightened national security scrutiny, adding geopolitical risk to markets. – AI-related stocks drive roughly 75% of S&P 500 gains; valuations near 27x forward P/E keep focus on upcoming chipmaker earnings. – Bitcoin fell below $90,000; traders watch $86,000 support while ETF flow stability could prompt a rebound. – Asian equities dropped more than 3% on AI volatility, firmer bond yields, and upcoming US jobs data. – Oil slipped under $64, with WTI near $59, as surplus concerns offset sanctions-driven supply risks. – China’s soybean buying boosted prices about 3%, while Apple’s iPhone 17 sales surged in China amid intensifying local competition.
