Stocks and bonds dropped as investors faced a trio of headwinds with a pullback in the artificial-intelligence trade, mounting bets on a US interest rate hike and rising oil prices due to a worsening of the Middle East conflict.
MSCI’s Asian equity gauge slid 2.8%, with South Korea’s Kospi index dropping about 5%.
A slump in chip firms forced a brief halt in the South Korean benchmark, the world’s best-performing gauge this year on the back of the AI trade. Stocks also fell in Japan and Taiwan with tech shares leading losses.
Futures contracts pointed to a 1% drop in European shares. Brent crude climbed 3.5% to above $96 a barrel after Israel said it struck several military targets in Iran, retaliating against missile attacks by Tehran.
Higher oil prices will add further pressure to inflation, and that coupled with strong US jobs data, helped boost bets for higher Federal Reserve interest rates.
The simultaneous retreat in stocks and bonds marks the biggest test in months for a bull market that has been fueled by easing geopolitical risks and the AI boom.
