Asia's Friday session turned ugly as the AI-trade selloff crossed the Pacific. Tokyo's Nikkei 225 gave up 1.3% on the day, finishing the week 5% lower, while Seoul's KOSPI slid 1.7% to put a 4.3% weekly loss on track. MSCI's Asia-Pacific measure without Japan eased 0.3%, confirming a 2.7% weekly slide — a fourth straight losing week for the regional gauge.
The morning was worse than the close. The Nikkei was down more than 2% in early trading before clawing some back; the KOSPI at one point fell 3.5%, with chipmaker SK Hynix 2.5% lower. Taiwan never opened — a typhoon kept the market shut. Hong Kong whipsawed between Al Jazeera's morning read of -0.5% and Reuters' +0.1% after Thursday's 3% slide.
Thursday's US session supplied the ammunition. Meta cratered nearly 8% after disclosing its first cash outflow in over a decade — the bill for its AI data-centre build — and unveiling a two-for-one split of non-voting stock to fund more of it; it also raised this year's capital-spending guidance to $135–145 billion as net profit missed. Tesla dropped 3.1% and trimmed its 2026 capex plans.
The Nasdaq fell 2.6%, its worst day since the 4.2% plunge on June 5. The S&P 500 lost 1.21%, its heaviest since July 29's 1.52% fall. Amazon and Nvidia fell over 4% apiece, Intel and AMD each collapsed around 8%, and only Apple held up among the megacaps, rising 1.2%.
Why it matters
Four red weeks in a row for the regional benchmark, a 5% weekly fall in Tokyo, and mainland blue chips roughly 20% below their late-June top: that is a drawdown feeding on itself, not a one-day wobble. What broke this week was the market's faith in the AI build-out — investors who cheered every new data-centre pledge are now asking whether the spending ever pays back, and the heaviest spenders are punished first. Gartner puts 2026 global AI investment at $2.7 trillion, climbing to $3.6 trillion in 2027; at that scale, even a small reassessment of returns moves trillions in market value.
The bond market's verdict was just as loud. Cash fled into Treasuries on Thursday night, knocking more than 19 basis points off the 10-year yield — the sharpest one-day fall since March 2023 — to 4.9591% on Friday, back under 5%. The 2-year dropped nearly 19 bps to 4.6566%. Traders trimmed Fed-tightening wagers too: a December hike is no longer fully priced, the implied odds down to 85%, and almost a quarter-point of 2027 hikes got stripped from the curve. Gold found no haven bid at all, ending Friday essentially unchanged at $4,021.99 an ounce after losing almost 3% overnight.
Nomura's Charlie McElligott summed up the shift in five words: "AI is under the cosh."
Oil refused to join the gloom. Brent added 4% on Thursday and pushed past $114.20 on Friday morning — its dearest since May — as Houthi strikes on Saudi Arabia revived supply fears. That stocks sank into an oil rally underlines the point: this week's tape is about positioning and fear, not the macro data.
For the US session that lit the fuse, see Thursday's Nasdaq selloff; for gold's overnight slide, see gold under pressure.
| Market | Friday move | Weekly move |
|---|---|---|
| Nikkei 225 | -1.3% | -5% |
| KOSPI | -1.7% | -4.3% (on course) |
| MSCI Asia-Pacific ex-Japan | -0.3% | -2.7% (4th straight losing week) |
| China blue chips | -1.1% | ~20% below late-June peak |
| Hang Seng | +0.1% (after -3% Thu) | choppy |
What to watch
- Next week's FOMC meeting: December-hike pricing is already down to 85% from fully priced; any hawkish surprise hits equities and the yen.
- Chip earnings and capex guides: SK Hynix and Big Tech's spending plans decide whether this is a one-week scare or a longer derating.
- Chinese blue chips: 20% under the late-June top and lowest since July 2025 — the next leg decides whether the pain reaches Hong Kong banks.
- Taiwan reopening: the market sat out Friday on a typhoon; reopening sessions after storm closures can gap hard either way.
MarketRadar take
The AI spending boom is being repriced as a growth risk, not an inflation risk. Equities falling into $114 oil, gold finding no haven bid while Treasuries print their best day in three years — that is the market pricing a demand scare, and the 19-basis-point collapse in the 10-year yield plus December Fed pricing cut to 85% from fully priced is real money voting. Asia's damage — four straight losing weeks, the Nikkei's 5% weekly slide, Chinese blue chips 20% off their June peak — leaves dip-buyers underwater, exactly the setup where selling feeds on itself.
