Asian Stocks, Gold Retreat As Momentum Unwinds: Markets Wrap

Asian stocks declined following a volatile session on Wall Street that saw broad losses across equities and haven assets.

MSCI’s Asia equity benchmark retreated further from its record close earlier this week, with Japanese shares leading the decline. The Nasdaq 100 lost 1% after a tepid outlook from Texas Instruments Inc. and a 10% slump in Netflix Inc. In late hours, Tesla Inc. slid as earnings missed estimates despite a sales surge.

Adding to the jitters, traders were watching developments in Washington after the Trump administration said it’s considering curbs on software exports to China, stoking fresh trade tensions. In the US, assets favored by retail momentum traders bore the worst losses, among them precious metals, crypto and companies in the artificial-intelligence.

“Previously leading momentum trades across multiple asset classes are now retreating,” said Dilin Wu, a strategist at Pepperstone Group Ltd. “The bigger risk comes from earnings. Strong results could stabilize sentiment, but any disappointments — especially from growth or tech stocks — could intensify the current retracement.”

Gold declined for a third day, edging back in the direction of $4,000 an ounce. Oil jumped almost 3% after the US announced sanctions on Russia’s biggest producers in its latest bid to pressure President Vladimir Putin to negotiate an end to the war in Ukraine.

The yield on 10-year Treasuries was steady after falling one basis point to 3.95% on Wednesday. A $13 billion sale of 20-year bonds was strong. The dollar index was little changed.

In Japan, newly appointed Prime Minister Sanae Takaichi ordered a fresh round of economic measures to help households and businesses cope with persistent inflation. Shares of Disco Corp. and Tokyo Electron Ltd. fell more than 4% to lead losses on Nikkei 225.

Also in the region, the Bank of Korea held its benchmark interest rate steady to avoid spurring a housing market rally. Chinese officials conclude their Fourth Plenum gathering, with a readout expected later in the day.

US Earnings

At a time when the equity rally has slowed, the flip side is that the proportion of US companies beating earnings expectations this quarter is the highest since 2021. Most S&P 500 firms typically top expectations, but this season stands out considering that analysts had set the bar higher.

Companies should continue to deliver superior earnings growth supported by a robust AI investment cycle, ongoing deficit spending and a still-resilient consumer, JPMorgan Chase & Co.’s Dubravko Lakos-Bujas says.

Meantime, the Federal Reserve has shown other US regulators the outlines of a revised plan that would dramatically relax a Biden-era bank capital proposal for Wall Street’s largest lenders, according to people familiar with the matter.

Separately, the US central bank is no longer receiving data on private-sector employment from an independent provider, adding to policymakers’ lack of timely information on the economy amid the ongoing federal government shutdown. Payroll services firm ADP Research stopped providing the data, which covers about 20% of the US private labor force.

Some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 10:06 a.m. Tokyo time

• Hang Seng futures fell 0.4%

• Nikkei 225 futures (OSE) fell 1.1%

• Japan’s Topix fell 0.7%

• Australia’s S&P/ASX 200 fell 0.2%

• Euro Stoxx 50 futures fell 0.2%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.1603

• The Japanese yen fell 0.2% to 152.27 per dollar

• The offshore yuan was little changed at 7.1267 per dollar

• The euro was little changed at $1.1603

• The Australian dollar was little changed at $0.6494

Cryptocurrencies

• Bitcoin rose 0.2% to $107,930.42

• Ether rose 1% to $3,818.1

Bonds

• The yield on 10-year Treasuries was little changed at 3.95%

• Australia’s 10-year yield was little changed at 4.11%

Commodities

• West Texas Intermediate crude rose 2.2% to $59.78 a barrel

• Spot gold fell 0.4% to $4,080.02 an ounce