Asian Stocks Drop on Fed Rate-Hike Bets
Asian stocks declined on August 31, following hawkish comments from Federal Reserve Chair Kevin Warsh that fueled bets on an interest-rate hike next month. The MSCI's regional equities gauge fell 0.7%, with the Kospi Index - a barometer for artificial intelligence investments - sliding 1.2%. Chipmakers Samsung Electronics Co. and SK Hynix Inc. were the biggest drags.
Futures contracts pointed to declines in Europe and further weakness in the tech-heavy Nasdaq 100 after last week's semiconductor selloff. Gold fell to around $4,415 an ounce as prospects for higher interest rates diminished its appeal. Brent crude climbed 2.5% to $90.25 a barrel after the US military struck Iranian rocket launchers.
Traders boosted bets on a September rate hike after Warsh spoke, although some market commentators expressed skepticism about such a move. Higher borrowing costs also risk undercutting this year's rally in AI shares, where elevated valuations make tech stocks vulnerable to rising yields.