Blog

(Bloomberg) — The blistering rally in global equities halted amid rising concern that technology valuations have run too far.

Asian shares fell 0.8%, tracking declines in the US, with technology firms dragging in Japan and China. Semiconductor Manufacturing International Corp. slumped 7% after reports that brokerages have cut the stock’s margin financing ratio to zero, citing high valuations. A gauge of Chinese tech shares in Hong Kong was set for its worst week since early August. Equity-index futures for Europe and the US were flat.

The dollar slipped after a four-day rally took it to the strongest since the beginning of August. A Bloomberg gauge of the currency was set for its best weekly gain since mid-November 2024. Gold extended its losses, while oil held the biggest decline in a week.

Global shares were set for a second decline in three weeks as investors took a pause following a robust rebound from April’s lows, when tariff announcements shook markets. The surge in AI-focused technology companies has fueled a debate over whether prices are running ahead of fundamentals.

“Some areas of the market appear overheated,” said Keith Lerner at Truist Advisory Services Inc. “The extended stretch without a meaningful pullback leaves the market more sensitive to negative surprises.”

Chip stocks in Asia, especially in Japan, had rallied earlier this month after companies such as Hitachi Ltd. and Fujitsu Ltd. formed alliances with OpenAI and Nvidia Corp. South Korean shares rose upon return from a week-long holiday with Samsung Electronics Co. jumping 5.4%.

“China tech is starting the fourth quarter with some profit-taking by investors after a stellar 3Q run, and that’s weighing down the index,” said Marvin Chen, a strategist with Bloomberg Intelligence.

In other corners of the market, Treasuries steadied after falling across the curve Thursday.

The yen headed for its biggest weekly loss in a year even as Japan’s new ruling-party leader Sanae Takaichi — a pro-stimulus lawmaker — said she wasn’t in favor of an excessively weak currency.

Takaichi will meet with her ruling coalition counterpart on Friday afternoon, amid fears of a possible rupturing of the 26-year partnership that has been the bedrock of political stability in Japan.

The Argentine peso rebounded after the US rushed to stabilize the country’s economy, offering $20 billion in financing and carrying out a rare intervention in currency markets after weeks of sharp declines.

Meanwhile, India’s Prime Minister Narendra Modi spoke with US President Donald Trump to review progress on trade talks, signaling renewed efforts by both sides to break the impasse.

What Bloomberg strategists say…

“The growing momentum for the greenback is spurring a fresh squeeze for overstretched dollar bears. There seems to be still plenty of money hanging on to bearish dollar positions in the hope that the ‘sell America’ narrative from early 2025 makes a return. If that’s so then further dollar squeezes are on the cards.”

— Garfield Reynolds, MLIV Asia Team Leader. Click here for the full analysis.

Investors are also focused on the recent strength of the dollar.

The world’s primary reserve currency is around a two-month high, even as the US government shutdown drags on, and traders in Asia and Europe say hedge funds are adding options bets that the rebound versus most major peers will extend into year-end.

“While further dollar upside may be limited without a notable rise in real yields, another leg higher in US Treasury yields could spark broader risk-asset corrections,” wrote Dilin Wu, a strategist at Pepperstone Group.

Corporate News:

Samsung Electronics Co. shares jumped, on track to close at an all-time high, riding investor enthusiasm for its potential in artificial intelligence chips and renewed confidence in its conventional memory business. Chinese battery stocks fell as the nation will impose export controls on some lithium batteries, critical materials, and related technology and equipment effective Nov. 8, according to a statement Thursday. Seven & i shares dropped after the company lowered its full-year outlook below analyst expectations, citing weakness in its domestic convenience store business. SoftBank Group Corp. is in talks to borrow $5 billion from global banks, refilling its coffers at a time Masayoshi Son is accelerating the Japanese investment firm’s bets on artificial intelligence. Apple Inc. is preparing to expand the roles of some top executives in response to the pending departure of longtime Chief Operating Officer Jeff Williams. Some of the main moves in markets:

Stocks

S&P 500 futures were little changed as of 2:03 p.m. Tokyo time Japan’s Topix fell 2% Australia’s S&P/ASX 200 fell 0.1% Hong Kong’s Hang Seng fell 1.1% The Shanghai Composite fell 0.6% Euro Stoxx 50 futures were little changed Currencies

The Bloomberg Dollar Spot Index fell 0.1% The euro was little changed at $1.1573 The Japanese yen rose 0.2% to 152.74 per dollar The offshore yuan rose 0.1% to 7.1290 per dollar Cryptocurrencies

Bitcoin was little changed at $121,217 Ether rose 0.1% to $4,344.01 Bonds

The yield on 10-year Treasuries declined one basis point to 4.13% Japan’s 10-year yield was little changed at 1.695% Australia’s 10-year yield advanced two basis points to 4.37% Commodities

West Texas Intermediate crude fell 0.4% to $61.28 a barrel Spot gold fell 0.2% to $3,969.82 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Kelly Li and Carmeli Argana.

©2025 Bloomberg L.P.

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

China has stepped up the enforcement of its controls on chip imports, as Beijing seeks to wean the country’s technology companies away from US products such as Nvidia’s artificial intelligence processors.

Teams of customs officers have been mobilised at major ports across the country in the past few weeks to carry out stringent checks on semiconductor shipments, according to three people with knowledge of the matter.

The inspections started with the goal of ensuring that local companies stop ordering Nvidia’s China-specific chips following guidance from Chinese regulators to discourage their purchase, said the people.

The targeted processors — Nvidia’s H20 and RTX Pro 6000D — are designed to adhere to US export controls and maintain the Silicon Valley chipmaker’s market share in China.

But one person said the checks had been extended more recently to all advanced semiconductor products, to also better target the smuggling of high-end chips that breach US export curbs.

Chinese customs had previously done little to prevent chip imports as long as appropriate duties were paid at the border. The Financial Times reported that at least $1bn worth of Nvidia’s top AI chips were smuggled and sold in China in the three months from May.

The border crackdown further marks Beijing’s determination to ensure its tech companies break free from relying on American technology and help the country win the AI race against the US.

China is seeking to put its resources behind domestic chipmakers, so they catch up in product performance and manufacturing capacity.

In addition to tightened border controls, some customs officials also looked at whether companies had made false declarations in the past about the import of advanced semiconductor products, said two of the people familiar with the inspections.

US quants trading giant Tower Research has been investigated for alleged smuggling of hardware including advanced chips, the FT reported last week. The probe was part of this new wave of import controls.

China’s regulators led by Cyberspace Administration of China (CAC), the internet watchdog, told tech companies led by ByteDance and Alibaba in mid-September to terminate their orders and testing for all Nvidia products. The new border controls have been carried out as a co-ordinated effort alongside the CAC.

The regulator’s guidance came just two months after Nvidia announced an earlier US export ban on H20 had been lifted by the Trump administration, while also introducing the RTX Pro 6000D, another watered-down AI chip for China.

The latest moves have occurred as senior officials in Beijing have determined that domestic chips have reached performance standards that compare with Nvidia’s China-specific chips.

China also aims to triple its production of advanced semiconductors next year, in a move designed to fill the demand left by Nvidia, the FT reported last month.

While Nvidia no longer includes China in its future revenue projection, it recorded $4.6bn in the first quarter of this fiscal year from selling H20 to China, its fourth-largest market, before the US temporarily restricted sales.

China’s customs did not respond to requests for comment. Nvidia declined to comment.