Asian Stocks Plunge as Bond Yields Rise and Oil Prices Soar
Asian stocks fell on Wednesday as concerns about rising bond yields and AI-related stocks weighed on markets. South Korea's Kospi led the decline, dropping 5.7% to 6,487.34. The index was followed by other regional benchmarks, including Japan's Nikkei 225, which sank 3.2%, and Taiwan's Taiex, which fell 1.7%. Meanwhile, oil prices jumped due to uncertainty about a deal between the US and Iran to allow oil tankers to exit the Persian Gulf freely.
The S&P 500 on Wall Street fell 0.7% for a third straight modest loss, with AI-related stocks leading the decline. Micron Technology dropped 7%, while Nvidia and Broadcom sank 2.3% and 3.2%, respectively. The yield on 10-year US Treasury bonds rose above 4.70%, contributing to market jitters.
High oil prices have pushed inflation higher, further increasing bond yields. This has made investors less willing to pay high prices for stocks, particularly those seen as expensive. As a result, the average long-term US mortgage rate has risen near its highest level in a year, hurting the housing industry.