Thanks for joining me. The global rout in stock markets deepened as more than $500bn (£384bn) was wiped off the value of artificial intelligence (AI) chip makers.
South Korean shares sank by as much as 6.2pc while Japan’s benchmark stock index tumbled more than 4pc at one point. MSCI’s main index of Asia-Pacific shares outside Japan was down as much as 2.3pc, which was the most since Donald Trump’s “liberation day” tariff onslaught in April.
Nvidia supplier Advantest dropped as much as 10pc, while Taiwan Semiconductor Manufacturing Co (TSMC) fell more than 3pc. The moves helped wipe around $500bn from two key indexes tracking semiconductor stocks.
Stocks retreated from record highs after key figures on Wall Street appeared to question the valuations of equity markets.
The bosses of Goldman Sachs and Morgan Stanley both suggested a correction was imminent over the next one to two years. Meanwhile it emerged that Michael Burry, the investor depicted in The Big Short who bet against the housing market ahead of the global financial crisis, had placed heavy positions against Palantir and Nvidia.
Palantir sank nearly 8pc on Tuesday after its projections in its third quarter results failed to impress investors.
Chris Weston, head of research at Pepperstone Group, said: “It’s a sea of red across broad markets, and one that offers a gloomy and damp portrayal of risk.
“We need to remain open-minded to the possibility that this could still further build. Simplistically, there aren’t many reasons to buy here.” Here is what you need to know.
5 things to start your day
1. Number of disabled young people doubles in 12 years | Mental health conditions including anxiety and depression are fuelling rise in benefits claim
2. Raise income tax by 10p for top earners to plug black hole, say economists | Think tank suggests Reeves should break manifesto pledges to show markets she has ‘a credible plan’
3. House prices to flatline until next election, warns estate agent | Savills says high interest rates and rise in unemployment are dampening buyer demand
4. World’s largest wealth fund rejects Musk’s $1tn payout | Norges Bank Investment Management becomes first major Tesla shareholder to oppose the deal
5. On the frontline of America’s car repossession boom | Number of seized vehicles hit 14-year high as more US drivers struggle to pay off auto loans
What happened overnight
Tokyo’s benchmark Nikkei 225 index dipped more than 4pc after a retreat on Wall Street spurred by selling of Big Tech shares.
Shares in energy and tech giant SoftBank Group sank 9.8pc on jitters over its investments in artificial intelligence. Computer chip maker Tokyo Electron dropped 4.1pc, while stock in Advantest, a maker of semiconductor testing equipment, lost 7.2pc.
South Korea’s Kospi declined as much as 6.2pc as Samsung Electronics shed 4.9pc. SK Hynix, which had logged major gains thanks to plans to develop artificial intelligence with chip maker Nvidia, lost 2.9pc.
Chinese markets were less affected. The Shanghai Composite index recovered from modest earlier losses to edge 0.2pc higher, to 3,967.53. Hong Kong’s Hang Seng declined 0.3pc to 25,888.16.
US stocks slumped on Tuesday over fears of an artificial intelligence bubble. The US benchmark S&P 500 closed down by 1.2pc. The tech-heavy Nasdaq Composite fell by 2pc while the Dow Jones Industrial Average was down by 0.5pc.
Cryptocurrencies, which typically move in lockstep with tech stocks, plunged, with the price of Bitcoin briefly falling below $100,000 for the first time since June. It is down more than 20pc since its record peak in October.
Weaknesses in the stock market drove investors to buy government bonds. Treasury yields dipped by a few basis points. The rate on 10-year Treasuries was 4.08pc.
Higher demand for US debt pushed up the value of the dollar to its strongest level since May.
