23/10/2026
Global tech selloffs deepened this week, as investors dumped this year’s top AI winners and rotated into safe-haven assets including US government bonds and the Japanese yen, while crude oil kept rising amid heightened geopolitical risks.
The slump started with chip stocks on Wall Street and quickly spread across Asia. South Korea’s KOSPI, a key gauge for AI trading, led regional losses, falling 1.5% and on track for its worst close since April. Chip giant Samsung Electronics also declined. The MSCI Asia Pacific Index lost 0.7%, hovering near its lowest level since July.
The sharp drop in AI equities triggered a rush into defensive bonds. US Treasuries held onto gains from the previous session after notching their biggest rally in more than two years. On Thursday, the benchmark 10-year Treasury yield tumbled 17 basis points to 4.97%. Japanese and Australian sovereign bonds advanced in tandem.
The yen, a classic crisis haven, outperformed all major currencies. USD/JPY edged down 0.1% to 156.65, and the US dollar weakened slightly against most G10 peers.
Oil prices remained resilient. Brent crude rose 0.4% to $113.60 a barrel, extending a 4% jump in the prior session. A deadly attack in Saudi Arabia stoked fears that escalating Middle East hostilities would disrupt crude supplies and kept oil bulls in control.
Big tech firms that fueled the four-year US bull market bore the brunt of the selloff. Their latest earnings amplified worries that the rally from late March had run too far, too fast. Next week, the sector will face another major test with earnings from Microsoft, Amazon and Alphabet, plus the Federal Reserve’s policy decision.
Outflows from growth stocks benefited defensive sectors. US utilities and healthcare shares climbed. The S&P 500 consumer staples index surged 3.1% on Thursday to a record high, poised for its best monthly performance since 1998.
Elsewhere, gold stayed under pressure. The metal fell 2.8% on Thursday, trading around $4,030 per ounce.
On Friday, Japan’s entire government bond yield curve moved lower. The 10-year JGB yield dropped as much as 11 basis points to 2.76%, while the 20-year yield fell 6 basis points.
Thursday’s flight to safety was driven by three factors: a steep drop in AI-related stocks, political instability in France and renewed tensions across the Middle East. The 10-year Treasury yield dipped below 5% for the first time in a month, as traders covered short positions and buying interest surged in Treasury futures.
Growing doubts over the sustainability and long-term returns of AI spending have pulled tech stocks down from recent peaks and weighed on the broader economic outlook. Traders have also scaled back bets on another Fed rate hike this year.
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