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(Bloomberg) — Asian stocks fell after shares of US regional banks tumbled on rising concerns about lending standards. Government bonds rose and gold was poised for a ninth week of gains.

The MSCI Asia Pacific Index fell 0.8%, with financial companies among the biggest losers. US equity-index futures fell 0.3%, after the underlying gauges dipped Thursday. Contracts indicated European shares were also set for a weaker open. Regional lenders slid in the US after the fallout from the collapse of subprime auto lender Tricolor Holdings spread beyond Wall Street.

As investors positioned for safe havens, gold and silver hit new all-time highs, powered by fears about credit quality in the US economy and heightened American frictions with China. Treasuries extended gains with the two-year yield falling to the lowest level since 2022 and the 10-year yield below 4%. An index of the dollar declined, while the yen strengthened past the 150 against the greenback.

The moves highlighted growing concerns about the US credit market, serving as the clearest evidence of the nervous undercurrents recently plaguing Wall Street, after stocks rallied to record high levels. That’s adding to a list of worries facing investors, including the US government shutdown, fears of an AI bubble and renewed US-China trade tensions.

“This US banking shock is more about market sentiment and liquidity than a systemic credit collapse,” said Dilin Wu, a strategist at Pepperstone Group Ltd. “It’s a good case of global risk aversion at the moment — fundamentals are okay, but fear is dominating the trading desks.”

In other corners of the market, shares in Hong Kong dropped more than 1%, leading losses in the region as tensions with the US continued to weigh on sentiment. Technology shares retreated with Taiwan Semiconductor Manufacturing Co. dropping 1.7% in Taipei trading as traders locked in gains.

The Treasury 10-year yield dropped two basis points to 3.96%, while similar-maturity Australian yields fell four basis points to 4.11%.

Earlier, the S&P Regional Banks Select Industry Index plunged 6.3% on Thursday, its biggest decline since April’s tariff-induced selloff and an echo of the losses that rocked the sector during a crisis in 2023.

Zions Bancorp fell 13% after a $50 million charge-off tied to a California Bank & Trust loan, while Western Alliance Bancorp dropped 11% after revealing exposure to the same borrowers.

Two high-profile collapses in short order — last month’s implosion of auto lender Tricolor and the bankruptcy of auto-parts supplier First Brands Group — have put traders on alert for more bad news waiting in the wings. Asian bank stocks dropped as well.

What Bloomberg strategists say…

Asia stock investors look more inclined to take money off of the table than to make bold positional moves, heading into the event horizon of another weekend of potential geopolitical bumps. The overall lack of conviction is neatly encapsulated so far by gold’s failure to sustain strong moves in either direction.

— Garfield Reynolds, Markets LIV Team Leader. Click here for full analysis.

“It will be creating some cautious pullback, taking risk off the table,” said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho Bank. “Investors in Asia may be cautious of exposures or liabilities on the books in Asia that may get hurt.”

In trade news, the White House is poised to ease tariffs on the US auto industry, a move that would deliver a major win for carmakers that have aggressively lobbied to stem the fallout from record-level import duties.

US-China trade tensions are once again emerging as a drag on equities, and the selloff in Asia and emerging markets could overshoot expectations given their stretched valuations, according to Morgan Stanley.

“Recent client marketing in the US indicates seasoned investors are positioning more defensively, seeking quality and yield,” strategists including Jonathan Garner wrote in a note.

Meanwhile, Bank of Japan Governor Kazuo Ueda indicated that the bank will continue normalizing policy if confidence in achieving its economic outlook strengthens — keeping the door open for a near-term interest-rate hike.

Also in Japan, the likelihood of Japan’s ruling Liberal Democratic Party forming a new coalition with opposition party Ishin is 50-50, the leader of the smaller party said Friday, as key talks continue ahead of a parliamentary vote on who will lead the nation.

In geopolitical news, President Donald Trump and his Russian counterpart Vladimir Putin agreed to meet in Budapest during a two-hour phone call. The conversation took place a day before Trump’s White House meeting with Ukrainian President Volodymyr Zelenskiy.

Oil headed for a third weekly decline as investors focused on oversupply and the fallout from renewed US-China trade tensions. Brent was near $61 a barrel as Trump said he would hold a second meeting with Putin, raising the prospect that an increase of barrels from the OPEC+ member will exacerbate a global glut.

Corporate News:

Meta Platforms Inc. is set to seal an almost $30 billion financing package for its data center site in rural Louisiana, marking the final step for the largest private capital deal on record. Apple Inc. is preparing to finally launch a touch-screen version of its Mac computer, reversing course on a stance that dates back to co-founder Steve Jobs. Infosys Ltd. raised the lower end of its forecast for yearly revenue, banking on a revival in spending on technologies such as artificial intelligence. Nintendo Co. has asked suppliers to produce as many as 25 million units of the Switch 2 by the end of March 2026. Taiwan Semiconductor Manufacturing Co. shares drop as much as 2.4% in Taipei, despite the chipmaker raising its revenue outlook on strong AI demand. Some investors are seen taking profits after a run-up in the stock in recent months. Some of the main moves in markets:

Stocks

S&P 500 futures fell 0.4% as of 12:46 p.m. Tokyo time Nikkei 225 futures (OSE) fell 1.5% Japan’s Topix fell 0.9% Australia’s S&P/ASX 200 fell 0.8% Hong Kong’s Hang Seng fell 1.6% The Shanghai Composite fell 1% Euro Stoxx 50 futures fell 0.8% Currencies

The Bloomberg Dollar Spot Index was little changed The euro rose 0.2% to $1.1710 The Japanese yen rose 0.3% to 150.00 per dollar The offshore yuan was little changed at 7.1255 per dollar The Australian dollar fell 0.3% to $0.6465 Cryptocurrencies

Bitcoin rose 1% to $109,000.08 Ether rose 2% to $3,928.49 Bonds

The yield on 10-year Treasuries declined three basis points to 3.94% Japan’s 10-year yield declined three basis points to 1.625% Australia’s 10-year yield declined six basis points to 4.09% Commodities

West Texas Intermediate crude fell 0.3% to $57.31 a barrel Spot gold rose 0.7% to $4,355.68 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Winnie Hsu, Mark Cranfield and Abhishek Vishnoi.

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