03/07/2026
Following two consecutive days of losses led by technology stocks, global equity markets staged a stabilization rally. Earlier, widespread concerns had grown that the AI-driven rally had been overdone Tech Stocks Rebound After Sharp Selloff as Cooling Rate-Hike Bets Lift Gold Prices
Global equity markets stabilized and staged a rebound following two consecutive days of heavy losses led by tech stocks. Prior to the recovery, investors widely worried that the AI-fueled rally had advanced too rapidly, leaving valuations stretched. Meanwhile, mounting expectations that the Federal Reserve would delay interest rate hikes sent gold prices climbing further.
On Friday, the MSCI Asia Pacific Index swung between gains and losses at the open before closing 0.7% higher. Nasdaq 100 futures edged up 0.3%. Major benchmarks in mainland China, Hong Kong and Japan all opened higher and traded in positive territory through the session.
South Korea’s KOSPI, one of the world’s top-performing equity gauges year-to-date, calmed after wild volatility to finish 1.2% up. The index had earlier slumped sharply, edging close to a technical bear market. Samsung Electronics led the rally among constituents with a 4.4% jump, amid reports that AI firm Anthropic PBC was in talks with Samsung to custom-manufacture AI chips.
On the macro front, softer U.S. June employment figures and falling global crude prices lifted Asian U.S. Treasury futures, significantly easing market bets on Fed rate hikes this year. Cash government bond markets worldwide were closed Friday for a U.S. public holiday, while the U.S. dollar weakened against most major currencies.
The Friday stock rebound eased pressure stemming from the earlier broad selloff in tech names, particularly semiconductor chips. The prolonged pullback had stoked fears that the AI-driven market surge had run too far, too fast. Nevertheless, most investors remain bullish on AI’s long-term growth prospects, though they have begun questioning whether the sector’s lofty current valuations can sustain amid rising capital expenditure and increasingly crowded competition.
In commodities, international crude oil is set to post a weekly loss. Shipping traffic through the Strait of Hormuz has picked up, boosting crude supply, while ongoing talks between the U.S. and Iran have eased supply-side jitters, dragging Brent crude lower.
Gold stood out among commodities, extending its weekly rally on the back of receding Fed rate-hike expectations. As a non-yielding asset, gold becomes less attractive when interest rates rise. Weak U.S. jobs data sharply reversed hawkish rate outlooks, offering strong support for bullion, which is now trading around $4,180 per troy ounce.
The U.S. Bureau of Labor Statistics released employment data on Thursday showing nonfarm payrolls rose by just 57,000 in June, with downward revisions to the prior two months’ job gains that erased much of the labor market’s earlier strength. While the U.S. unemployment rate dipped to 4.2% in June, labor force participation fell notably.
The soft jobs report buoyed major U.S. equity benchmarks including the S&P 500 and Nasdaq 100, and reinforced market conviction that the Fed would adopt a wait-and-see stance and hold off on additional rate hikes. Traders have sharply priced down the odds of further tightening, though the consensus view still calls for at least one rate increase before the end of the year.
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