Asian markets opened lower in the last full trading week of 2025, fueled by concerns about the prospects for tech company profits and growing AI spending. The MSCI regional stock index fell around 0.4%, while South Korea, which has been riding the "AI euphoria" for some time, fell more than 2%. In the US, index futures fluctuated slightly after Wall Street closed lower on Friday, led by weakness in tech stocks. Bitcoin also slumped, dropping to around US$88,000.

Global risk-on sentiment is waning as investors begin to question whether tech stocks are still worth their high prices and whether aggressive AI spending will truly generate substantial profits. Asia is considered more vulnerable because many countries in the region rely on component manufacturing, the backbone of the tech boom. Some analysts even see this movement as an early sign that the "AI bubble" could burst in the near future.

Signs of skepticism are growing: from Nvidia's stock sell-off to Oracle's plunge after disclosing rising AI costs, plus worsening sentiment around corporate networks exposed to OpenAI. The big question heading into 2026 is: should investors reduce their exposure to AI for fear of a bubble bursting, or increase their exposure because AI is seen as a game-changing technology? The main concerns remain: AI development is expensive, the benefits are substantial but not yet fully clear, and consumers may not be willing to pay for such high-priced AI services.

On the other hand, the US bond market is relatively stable as debate continues over how far the Fed will ease policy next year. Some officials want interest rates to remain somewhat tight to curb inflation, while others project more cuts in 2026. Gold is flat after several days of gains, the dollar is narrowly focused, and the market awaits Chinese data (retail sales, industrial production) and major central bank meetings this week, such as the Bank of England and the Bank of Japan. Even the "Santa Rally" is said to be struggling to ignite if AI valuation fears grow—but if there's a catalyst from data or a central bank meeting, it could trigger a rebound... or even a deeper sell-off. (az)

Source: Newsmaker.id