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Stocks retreat globally as tech correction triggers risk-off

Global equity markets declined sharply to start Wednesday after Wall Street’s sell-off in technology shares prompted a wave of profit taking and risk aversion, with Asian indices registering some of the steepest falls. The pullback follows sustained gains to record highs in major indices, fuelling investor concerns about stretched valuations in the tech sector. US and European equities lost ground on Tuesday, with notable weakness in heavyweight technology names, while gold rebounded and Treasuries rallied as investors rotated into safe-haven assets. Markets are also watching a key Supreme Court hearing on the legality of US tariffs, which could shape global trade relations.

  • Data
  • Autore Shane Strowmatt, Senior Investment Writer
  • Tempo di lettura 5 minuto

Falling market
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Asian stock markets declined sharply on Wednesday, mirroring Wall Street’s overnight sell-off as concerns about stretched valuations in technology shares intensified. Japan’s Nikkei 225 and South Korea’s KOSPI were among the hardest hit, plunging 2.3% and 2.95, respectively, after reaching record highs, driven by steep drops in technology heavyweights such as SoftBank Group and Samsung Electronics. Elsewhere, Australia’s S&P/ASX 200 slid 0.1%, and Hong Kong’s Hang Seng Index retreated 0.2%. Mainland China’s CSI 300 was bucking the trend, trading 0.3% higher following slightly better-than-expected October services sector data. The decline in markets came despite a solid macroeconomic backdrop: Fifteen out of eighteen tracked Asian sectors reported output expansion in October, marking the region’s highest level of sectoral activity growth since March, according to S&P Global Asia Sector PMI data released Wednesday.

US equities fall from record highs

US stock markets retreated on Tuesday as investors took profits following recent record gains, particularly affecting technology shares amid renewed caution over high valuations. The Dow Jones Industrial closed down 0.5% at 47,099.01 points, the S&P 500 lost 1.1% to 6780.19 points, and the Nasdaq 100 fell 2.1% to 25,435.70 points, reversing Monday’s rise towards fresh highs. Tesla shares dropped 5.2% after reporting nearly 10% lower output from its Shanghai factory in October, raising concerns about global demand, while Palantir declined 8% as analysts flagged stretched valuations despite robust results. Shares in Uber, Spotify, Norwegian Cruise Line and Sarepta Therapeutics also suffered notable losses on the back of mixed quarterly figures and disappointing forecasts. AMD shares fell 3.7% during the session and another 3.3% in after-hour trading. The chipmaker reported third-quarter revenue of USD 9.25 billion and earnings per share of USD 1.20 on Tuesday, both surpassing market expectations. AMD shares have more than doubled in price so far this year.

Supreme Court reviews Trump’s tariff powers

The US Supreme Court begins hearing arguments on Wednesday in a landmark case examining whether US President Donald Trump’s use of emergency powers to impose wide-ranging tariffs exceeds his legal authority. Lower courts had previously ruled that Trump’s application of the International Emergency Economic Powers Act for tariffs overstepped his mandate, prompting challenges from affected businesses and twelve mostly Democratic-led states. Trump has urged the court, with its conservative majority, to uphold the tariffs, warning of economic and national security risks should they be overturned; the tariffs have generated USD 89 billion in collections since February. The outcome is expected to shape the scope of presidential authority on trade and could have wide-ranging effects on global economic relations.

European equities mixed amid tech caution

European stock markets ended Tuesday without clear direction as warnings from the US technology sector prompted more cautious trading. The euro area’s EuroStoxx 50 slipped 0.3% with most major indices in the red. Switzerland’s SMI bucked the trend, gaining 0.4%. Sentiment weakened after steep losses among US technology shares and declining cryptocurrency prices, while telecom stocks such as Telefonica fell over 13% following plans to halve its 2026 dividend.

Gold rebounds as investors seek safety

Gold prices recovered on Wednesday, approaching USD 4000 per ounce, as investors sought safe-haven assets following the steepest drop in global equities in nearly a month driven by worries over high valuations. The rise in spot bullion reversed almost 2% losses from the previous session, with Treasuries also rallying somewhat amid increased risk aversion. Analysts noted gold remains about 50% higher year-to-date, having reached record levels last month before some investors took profits. Despite recent volatility and uncertainty around US monetary policy, continued strong demand from both official and private buyers is expected to support prices moving forward.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from BMW, Koninklijke Ahold Delhaize, McDonald's, Novo Nordisk, Qualcomm, Siemens Healthineers, Toyota Motor, and Wolters Kluwer.

Economic data in focus: Services Purchasing Managers’ Indices from several of the world’s largest economies, including Spain (09:15), Italy (09:45), France (09:50), Germany (09:55), euro-area (10:00), UK (10:30), US (15:45); German factory orders (08:00), US ADP National Employment Report (14:15), US ISM Services Purchasing Managers’ Index (15:00).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.