Asian shares wobble as tech rout boosts bonds, dents rate hike bets

Asian markets experienced a wobble on Friday as the tech sector faced a rout, driving up bond prices and reducing expectations of further rate hikes from the Federal Reserve. The KOSPI in South Korea fell 1.7%, on track for a 4.3% weekly decline, with SK Hynix memory chipmaker down 2.5%. The Nikkei in Japan declined 1.3%, and the Hang Seng in Hong Kong edged up 0.1% after slipping 3% the previous day.

US Treasury bonds rallied as investors fled to safer assets, with yields plunging across the curve. The 10-year Treasury yield dropped more than 19 basis points, hitting its lowest level in over a year, while government bonds in Asia also rallied. Safe-haven currencies like the yen and Swiss franc gained strength, while the US dollar slipped against its major counterparts.

Tech giants such as Meta and Tesla suffered heavy losses, with Meta cutting its 2026 capital spending plans and Tesla reducing its spending for 2026. The AI sector's struggles added to the market's woes, as concerns grew about a potential bursting AI bubble and its impact on the US economy and data-center investments.