Oil prices retreated from multi-month highs on Thursday and gold eased from a record peak after U.S. President Donald Trump calmed market anxiety over potential U.S. military action against Iran.
A selloff in tech stocks extended into Asian trading, following declines on Wall Street, as investors rotated out of high-flying chip and artificial intelligence-related names while searching for bargains in other parts of the market.
Currencies paused for breath after the yen dropped to its weakest point since July 2024 against the U.S. dollar overnight and then bounced back sharply amid warnings of possible intervention by Japanese authorities.
Japanese bond yields eased back from record peaks following a spike driven by speculation - which was later confirmed - that the government will call snap elections, a scenario that is expected to lead to bigger fiscal stimulus.
Brent crude futures dropped 3.4% to $64.25 and Nymex futures sank 3.4% to $59.89, after vaulting as high as $66.82 and $62.36, respectively, in the previous session.
Trump said on Wednesday afternoon that he had been told that killings in Iran's crackdown on nationwide protests were subsiding and he believed there was currently no plan for large-scale executions.
Gold fell 0.5% to around $4,598 per ounce. On Wednesday, it reached an unprecedented $4,642.72. Stocks in Asia were mixed, but tech shares were met with more selling.
In Japan, the tech-heavy Nikkei (.N225), opens new tab eased 0.9% after hitting an all-time peak in the previous session, though the broader Topix (.TOPX), opens new tab extended its own record high on Thursday with a 0.8% advance.
Taiwan's TAIEX (.TWII), opens new tab sank 0.4% and Hong Kong's Hang Seng (.HSI), opens new tab slipped 0.5%, with tech shares weighing. Chinese blue chips (.CSI300), opens new tab edged 0.1% lower, while South Korea's KOSPI (.KS11), opens new tab added as much as 1.3% to a fresh record high. The Bank of Korea left interest rates unchanged on Thursday, as expected by economists, and signalled an end to its current easing cycle to prioritize financial stability.
FTSE futures pointed 0.6% higher, suggesting the cash index would open with an extension of its record high from Wednesday. Pan-European STOXX 50 futures tacked on 0.3%.
S&P 500 E-mini futures were flat after the cash index (.SPX), opens new tab sank 0.5% overnight. The tech-focused Nasdaq Composite (.IXIC), opens new tab dropped 1%.
"There’s a rotation playing out on Wall Street that’s ultimately weighing on indices but indicates that the internals of the market are holding up reasonably well," said Kyle Rodda, an analyst at Capital.com.
"The strength in cyclicals, in no small part due to the positive outlook for the U.S. economy, is propping up stocks and providing constructive signals to market participants of broadening market strength."
The U.S. dollar was steady against its major peers on Thursday, with the dollar index up very slightly at 99.137.
