Asian equities swung between small gains and losses as investors weighed the fallout from the selloff in global stocks, with traders watching whether regional markets can stabilize after Wall Street's sharp losses.

MSCI's stocks gauge for Asia Pacific fell around 0.1% after the index had its biggest drop since early April. 

Contracts for US stocks edged lower in early Asian trade after the S&P 500 index fell for a fourth day. A basket of the Magnificent Seven companies declined 1.8%. Nvidia Corp., at the center of the AI frenzy, slumped 2.8% ahead of its earnings report after Wednesday's close.

Bitcoin steadied to trade around $92,500 after briefly dropping below $90,000 Tuesday to spook market sentiment.

A selloff in the world's largest technology companies drove stocks to their longest slide since August, underscoring the US market's narrow reliance on a handful of growth giants. Wall Street has grown increasingly concerned that AI isn't yet generating enough revenue or profits to justify the massive spending on infrastructure. 

"The question isn't really whether we're in a bubble," said Sonu Varghese at Carson Group. "The real question is how long the current trend in AI spending will last and how bad the fallout will be when it ends." The S&P 500 is down more than 3% this month, on pace for its worst November since 2008. Volatility has roared back. Wall Street's so-called fear gauge, the Cboe Volatility Index, topped 24 — above the key 20 level that causes concern for traders — and reached its highest in a month.

Another major focus for investors is whether the Federal Reserve will cut interest rates next month. Traders have less conviction about another reduction in borrowing costs, with swaps now implying a less-than-50% likelihood of a December move. Several policymakers have recently cautioned against one, citing the risk of inflation, although Fed Governor Christopher Waller repeated his view in favor of lowering rates.

Source: Bloomberg