An 8% drop for South Korea’s chip-heavy KOSPI benchmark triggered a 20-minute trading halt and has it down almost 17% from last week’s record high.

Japan’s Nikkei fell 3.5% in early trade, though ‌U.S. S&P 500 ⁠and Nasdaq ⁠100 futures made small gains.

The Nasdaq had dropped 4.2% on Friday, with selling concentrated in semiconductor stocks after a hot jobs report ramped up expectations for Federal Reserve interest rate hikes, putting the brakes on what has been a sparkling AI-led rally.

Two-year Treasury yields rose more than 11 basis points on Friday and benchmark 10-year Treasury futures were about five ticks lower early on Monday morning in Asia.

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“The AI-drives-everything narrative frayed last week,” said Bob ⁠Savage, head ‌of markets macro strategy at BNY.
“Whether this is a healthy pause in the nine-week equity rally or a top remains the key question. The ⁠IPO focus on SpaceX and Anthropic is part of the pause – whether to make room for the new market cap or to rethink value.” INFLATION AND ECB AHEAD

The week ahead is headlined by the giant SpaceX listing, expected to price on Thursday and trade on Friday, but will also have inflation in focus with U.S. consumer price data due on Wednesday and central bank meetings in Canada and Europe.

Last week, bitcoin notched its heaviest weekly drop since the collapse of crypto exchange ‌FTX in late 2022, falling about 16%. It was hovering just shy of $63,000 on Monday.

SpaceX’s debut is expected to be followed by other mega IPOs in the coming months from Anthropic ⁠and OpenAI, raising so much money that brokers are nervous it could draw down other assets.

The Middle East situation also remains delicate, and Brent crude futures were up about 2.6% to $95.45 a barrel on Monday morning after an Israeli attack on Beirut prompted Iran to direct a salvo of missiles at Israeli targets.

OPEC+ agreed on Sunday to the fourth increase in its oil output targets in as many months.

In currency trade the dollar was firm and holding above 160 yen and pushed the Australian dollar to $0.7038. The euro hovered at $1.1518.