Global Markets Slip as U.S. Bond Yields Hit 24-Year Highs
Asian and Wall Street markets retreat as U.S. Treasury yields hit 24-year highs. Ray Dalio warns of an impending AI bubble amid soaring debt and interest rates.
Asian stock markets traded lower on Thursday following a pullback on Wall Street and a surge in U.S. Treasury yields to a 24-year high. In Tokyo, the Nikkei 225 dropped 0.9%, while Seoul's Kospi lost 1%. Stocks in China and Hong Kong also traded lower.
Samsung Reports Operating Profit Surge
Samsung reported a nearly ninefold surge in quarterly operating profit. The world's largest memory chip maker posted an operating profit of $80 billion for the quarter ending in September, marking a new quarterly record. However, the result was slightly below average analyst estimates. Revenue totaled 195 trillion won, also falling short of expectations. Samsung shares declined about 1%.
Wall Street Pulls Back as Bond Yields Hit Multi-Year Highs
Futures traded flat following yesterday's halt to a record-setting rally. The S&P 500 fell 0.2%, retreating from a record high reached a day earlier, the Dow Jones lost 0.7%, and the Nasdaq dropped 0.2%. The declines were driven by surging bond yields: the 10-year Treasury yield reached 5.36%, its highest level since April 2002, while the 30-year yield climbed to 5.73%.
"For the first time in decades, equity markets are facing a real competitor: bonds," said Savita Subramanian of Bank of America.
Tel Aviv Market Responds to Global Sell-Off
Dual-listed stocks returned to Tel Aviv with minor arbitrage gaps. Meanwhile, the local exchange was swept up in the global turmoil triggered by spiking bond yields and developments in the Strait of Hormuz. Trading closed sharply lower, with the Tel Aviv 35 index recording its worst trading day since June, plunging 2.4%. The Tel Aviv 90 lost about 2.1% to hit a more than one-year low.
Ray Dalio Warns of AI Bubble
Billionaire investor Ray Dalio warned that artificial intelligence is a "classic bubble" nearing its bursting point, driven by rising interest rates and the need to convert wealth into cash. Speaking at the Forbes Global CEO Conference in Singapore, the Bridgewater Associates founder noted that massive amounts of debt are being utilized to fund AI infrastructure amid soaring global yields.
