Nasdaq Slide Triggers Asia Tech Rout as Gold Nears $4,000

A 2% drop in the Nasdaq Composite sparked steep declines across Asia, sending Japan’s Nikkei 225 down 2.9% and South Korea’s KOSPI lower by 2.3%. SoftBank Group plunged 10.9%, Samsung Electronics slid 3.9%, and SK Hynix lost 9.2% as investors reacted to Wall Street’s retreat and warnings from US bank CEOs about unsustainable valuations. Gold rose 0.8% to $3,962 per ounce, Bitcoin recovered 1.8% to $102,104, and Democrats swept key US elections, with Zohran Mamdani elected as New York City’s first Muslim mayor.

Equities

London’s FTSE 100 closed 0.1% higher on Tuesday, helped by gains in healthcare and energy stocks as a weaker pound offered support to internationally focused companies. The modest rise came despite broader weakness across European and US markets. The mid-cap FTSE 250 slipped 0.5%, extending its losing streak to a seventh consecutive session, while sentiment in continental Europe remained subdued. The weaker pound followed remarks from Chancellor Rachel Reeves, who warned of “hard choices” ahead in her pre-budget speech, pushing UK government bond yields lower.

Among individual stocks, BP rose 1.3% after reporting a smaller-than-expected decline in third-quarter underlying profit. The energy group’s results reassured investors following recent volatility in oil prices. Diversified Energy gained 8.1% after lifting its annual profit forecast, further boosting the energy sector, which ended 0.3% higher. Healthcare stocks also provided strong support for the main index, climbing 1.3% as investors sought defensive exposure. By contrast, Associated British Foods fell 3% after announcing it was considering separating its Primark fashion retail business from its food operations. The company also reported a 13% fall in full-year profit, adding pressure to its shares.

Elsewhere, metal miners declined as a stronger US dollar weighed on commodity prices, with both gold and copper retreating. Precious and industrial mining stocks fell more than 1.7%, while insurers and investment banks slipped 1.3% and 0.3% respectively. Aerospace and defence shares were also weaker, with engineering group Senior down 2.9%. Despite the sectoral weakness, the healthcare and energy gains were enough to keep the FTSE 100 marginally in positive territory.

In the United States, all three major indices ended sharply lower on Tuesday following warnings from top Wall Street bankers about overvalued equity markets. The Dow Jones Industrial Average fell 0.53%, the S&P 500 lost 1.17%, and the Nasdaq Composite slid 2.04%, marking its largest one-day percentage drop since early October. The decline followed comments from the CEOs of Morgan Stanley and Goldman Sachs, who suggested that the recent rally may be unsustainable after months of strong gains led by the technology sector.

Technology shares saw the steepest losses, with the Philadelphia Semiconductor Index dropping 4.0%. Six of the “Magnificent Seven” major tech names fell on the day. Palantir Technologies slid 8% even after forecasting stronger-than-expected fourth-quarter revenue, while Uber dropped 5.1% as its adjusted core profit missed analysts’ estimates. Spotify fell 2.3% and Shopify tumbled 6.9% after reporting their quarterly results. The pullback reflected renewed caution around tech valuations following a period of rapid growth driven by artificial intelligence optimism.

Forex & Commodities

The US dollar held firm after touching its highest level since April at the close of Tuesday trading, supported by reduced expectations of imminent Federal Reserve rate cuts and continued investor caution. The dollar index was steady at 100.16, having reached 100.25 late on Tuesday. The currency traded at $1.1486 against the euro and ¥153.62 against the yen, while the Swiss franc strengthened slightly to ₣0.8090 per dollar. Sterling was unchanged at $1.3026, near a seven-month low, following comments from UK Chancellor Rachel Reeves suggesting that broad tax rises may be unveiled in her upcoming budget.

In Asia, the Australian and New Zealand dollars edged higher after recovering from overnight losses that followed a surge in risk aversion and a sharp Wall Street sell-off. The New Zealand dollar had earlier touched a seven-month low against the US currency after the unemployment rate rose to its highest since 2016.

Spot gold rose to $3,966 per ounce early on Wednesday, rebounding after a one-week low the previous session, as buyers stepped in ahead of US employment data. Silver gained to $47.61 per ounce, while platinum and palladium were also slightly firmer. Traders are awaiting private US payroll figures later today for further clues on the Federal Reserve’s stance, following last week’s rate cut and indications from Chair Jerome Powell that policy easing may now pause.

Brent crude slipped to $64.38 a barrel and US West Texas Intermediate to $60.49 early this morning, extending Tuesday’s decline. Prices were weighed by a strong dollar, weaker market sentiment and data showing a rise in US crude inventories. OPEC+ confirmed it will increase output by 137,000 barrels per day in December but will pause further increases in early 2026.