Asian Stocks Poised for Rebound Amid Extended US Market Selloff
By Toby Alder / Bloomberg
November 19, 2025
Asian equities were set for a positive start on Wednesday, aiming to bounce back after recent declines, even as US markets continued to experience a broad selloff fueled by concerns over high valuations in the artificial intelligence (AI) sector.
Market Overview
Equity-index futures pointed to gains in major Asian markets including Japan and Hong Kong, both of which had endured three consecutive days of losses. Meanwhile, Australian shares were expected to open slightly lower. On Wall Street, the S&P 500 index dropped for a fourth straight day, marking its longest losing streak since August. The so-called "Magnificent Seven" tech giants collectively slipped 1.8%, led by Nvidia Corp, which declined 2.8% ahead of its earnings report scheduled after Wednesday’s market close.
Cryptocurrency and Bonds
Bitcoin recovered some ground after briefly dipping below the US$90,000 mark (approximately S$117,251.55), signaling cautious investor optimism despite volatility. The yield on 10-year US Treasury bonds fell by three basis points to 4.11%, indicating increased demand for safer assets. The US dollar showed mixed movements amid market uncertainty.
Concerns Over AI Sector Valuations
The ongoing selloff in US equities has been largely driven by doubts about whether artificial intelligence businesses are currently generating sufficient revenue and profits to warrant the hefty expenditures poured into AI infrastructure and development. Notably, Microsoft Corp and Nvidia announced plans to jointly invest up to US$15 billion in AI company Anthropic PBC. This investment ties Anthropic more closely to Microsoft and Nvidia, who are also major backers of OpenAI, another AI frontrunner.
Financial strategist Sonu Varghese of Carson Group commented, “The question isn’t really whether we’re in a bubble. The real question is how long the current trend in AI spending will last and how severe the fallout might be when it ends.”
November Market Performance and Volatility
The S&P 500 has fallen more than 3% this month, positioning November 2025 as potentially its worst since 2008. Market volatility has surged accordingly, with the Cboe Volatility Index (VIX), often termed Wall Street’s “fear gauge,” climbing above 24 — surpassing the 20 threshold that typically alarms traders. This marks the highest volatility level seen in a month.
Interest Rate Uncertainty
Adding to market jitters is uncertainty about upcoming US Federal Reserve policy decisions. Investors have become increasingly skeptical about the likelihood of an interest rate cut at the Federal Reserve’s December meeting. Market instruments indicate less than a 50% chance of a rate reduction, with several Fed officials publicly cautioning against easing borrowing costs prematurely due to inflation risks. Fed Governor Christopher Waller remains an exception, advocating for a rate cut.
US Economic Data and Labor Market Signals
Treasury bonds are on track for their first consecutive weekly gains this month, reflecting cautious investor sentiment amid weakening US labor market signals. According to the US Labor Department, jobless claims reached 232,000 in the week ending October 18. Additionally, data from ADP Research showed that companies have been shedding an average of 2,500 jobs per week over the four weeks ending November 1. The labor market snapshots bridge the delay in official employment data, which has been postponed due to the longest government shutdown in US history. Though funding for statistical agencies has been restored, the release date for October economic reports remains unclear.
James Demmert of Main Street Research suggested that if Thursday’s official jobs report confirms weaker-than-expected figures, it could renew confidence in a December Fed rate cut, potentially sparking a Santa Claus rally. “Such a rally could see the S&P 500 climb as high as 7,100 before year-end,” he said.
Nvidia’s Pivotal Role
Nvidia’s market capitalization has grown significantly, now surpassing the combined size of the US energy, materials, and real estate sectors, according to Ryan Grabinski at Strategas. At times, Nvidia even eclipses the industrials and utilities sectors combined.
“The outcome of Nvidia’s earnings report is likely to have ripple effects in both US and global markets,” Grabinski noted. “While enthusiasm around AI has tempered recently, a strong report could reignite optimism. However, expectations remain very high.”
Following Nvidia’s earnings release, the market’s focus will shift to the delayed US September jobs report due on Thursday, which could influence Federal Reserve policy direction.
Commodities Update
In commodity markets, oil prices climbed amid hawkish signals from the European Union’s top diplomat, raising the prospect of tightened sanctions on Russia. Meanwhile, gold prices showed little change, reflecting the overall cautious investor mood.
Conclusion
As Asian markets prepare to recover from a recent stretch of losses, investors worldwide remain cautious amid ongoing volatility in US tech stocks, uncertainties surrounding AI sector valuations, mixed economic data, and divergent views on monetary policy. Market participants will closely monitor Nvidia’s earnings and upcoming US labor reports for clues on the path forward heading into year-end.
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