Asia Chipmakers Rebound from Selloff as CoreWeave Jitters Ease, Volatility Persists

Asian equities rebounded on Friday as bargain hunters moved in following the previous session’s sharp selloff, with chipmaker-heavy indexes in South Korea and Japan leading the recovery. South Korea’s KOSPI climbed more than 3% after tumbling nearly 8% on Thursday, while Japan’s tech-heavy Nikkei rose about 1.9% after a roughly 5% drop. Taiwan’s benchmark edged up 0.3% and Hong Kong’s Hang Seng added 1%. Mainland Chinese blue chips were little changed.

The rebound came after a rout driven by two distinct shocks. First, bond yields on Nvidia-backed cloud provider CoreWeave spiked to levels associated with distressed debt, stoking fears about the mounting debt pile financing the artificial intelligence boom. Shares of CoreWeave recovered some composure on Thursday after extending a 15.5% slump earlier in the week. Second, China’s ChangXin Memory Technologies (CXMT) reported progress on a next-generation DRAM architecture, raising competitive pressure on established memory makers such as SK Hynix and Micron.

The calm, however, may prove fragile. “Global markets are getting very noisy once again after a period of low volatility: Wall Street is whipsawing, bond yields are swinging, currency markets are doing backflips, and commodity prices are running in multiple directions,” Kyle Rodda, a markets analyst at Capital.com, wrote in a client note. “Global markets could potentially be in for a protracted period of this sort of volatility,” he added, pointing to upcoming tech earnings and uncertainty over interest rate trajectories.

**Indonesia Rout Deepens on MSCI Downgrade**

The outlier in Friday’s regional picture was Indonesia, where the equity benchmark slumped 11% — the biggest one-day fall since the 1998 Asian Financial Crisis. The selloff followed an announcement by index provider MSCI that the stock market no longer merits “emerging market” classification, setting up a downgrade that will force passive funds to pull money from the country.

“The proposal highlights MSCI’s dissatisfaction with the pace of reforms and raises further questions about the investability of the market,” said Tan Altundag, investment manager for emerging equities at Pictet Asset Management, who has no holdings in Indonesia. “The investment implications could be significant.”

**Bond Markets Stabilize, Dollar Weakens**

Treasury yields found a floor on Friday after plunging on Thursday as investors rushed to safe-haven sovereign debt. The dollar limped toward its first weekly loss in five weeks as lower US yields eroded the currency’s appeal. The dollar index languished below 102 after a sharp pullback from a 1-1/2-year high near 103 on Wednesday.

Gold inched higher to around $4,173 after climbing 1.6% on Thursday amid safe-haven demand. Brent crude edged down 0.7% to $105.14 a barrel, while US West Texas Intermediate crude fell 0.7% to $97.26.

**Central Bankers Cautious on Rates**

Federal Reserve Chair Kevin Warsh, speaking at IMF/World Bank meetings in Bangkok on Friday, voiced optimism about US economic strength but gave little away on the chances of a rate hike this month, repeating that he does not “prejudge meetings”. Markets currently see about 28% odds for a rate hike at the end of this month, according to one source.

Bank of England Governor Andrew Bailey earlier said soaring energy prices caused by the Iran war appeared to be having limited wider effects on British prices so far, but it was too soon to draw firm conclusions.

**Oil Market Tensions Persist**

Crude oil prices remained elevated, with Brent trading near $106 a barrel, up almost 1% for the week, according to NDTV Profit. Uncertainty over the restoration of oil shipments through the Persian Gulf increased after US Central Command confirmed on Thursday that an Iranian projectile struck a container ship that sank in the Strait of Hormuz earlier this week, adding to concerns about the security of a key energy route.

The Trump administration is considering lifting sanctions on some vessels in the world’s “shadow fleet” that carried oil from countries including Russia, Iran and Venezuela, in a bid to cut record global freight rates, a US official said on Wednesday.

**Outlook: Volatility Ahead**

With tech earnings rolling out over coming weeks and markets attempting to gauge the trajectory of key interest rates, analysts expect volatility to stay elevated. US consumer prices rose 0.6% in September from the previous month and 3.7% from a year earlier, with higher fuel costs contributing to the increase, according to NDTV Profit. The prospect of tighter monetary policy has weighed on technology shares, as investors assess whether higher borrowing costs could constrain spending on AI infrastructure.

Pan-European STOXX 50 futures advanced 0.7%, while US stock futures edged up with Nasdaq and S&P 500 futures each 0.2% higher, after the respective cash indexes notched small gains on Thursday.