A look at the day ahead in European and global markets from Stella Qiu
It is a sea of red in Asia as investors grapple with risk posed by the U.S. intensifying its technology war with China in areas as varied as artificial intelligence, quantum computing and aerospace.
The U.S. also is seeking to toughen restrictions on the export of semiconductor technology to China - particularly chips from artificial intelligence leader Nvidia - with the help of allies, Bloomberg reported.
Hong Kong's Hang Seng index initially fell as much as 2.7%, dragged down by an almost 8% plunge in tech giant Alibaba following a 10% drop in its American Depository Receipts. The sell-off abated, though, as investors chose to buy the dip given that stock's recent world-beating rally.
The Hang Seng was last down 0.6% as Hong Kong-listed tech companies recouped early loss with more talk of demand for low-cost AI models from DeepSeek.
On Wall Street, investors continue to question whether massive spending on AI is justified, as evident in the cautious mood ahead of Nvidia's earnings on Wednesday where analysts expect a whopping 72% increase in quarterly revenue.
Gold is benefiting from the U.S. presidency of Donald Trump who was busy with Russia advocating a quick end to war in the Ukraine while dialling up tariff rhetoric against Canada and Mexico. The old-world asset set a record overnight, drawing tantalisingly close to $3,000 an ounce.
Curbing risk appetite is a series of soft U.S. economic data including retail sales, consumer confidence and surveys on the manufacturing and services sectors. They all came in weak and pointed to intensifying price pressure, eroding confidence in the exceptionalism of the U.S. economy.
Market participants have now fully priced in the prospect of the Federal Reserve lowering its policy interest rate by 50 basis points this year rather than 40 bps seen just last week.
Treasury yields duly touched fresh lows in the Asian trading session. Benchmark Treasury yields hit a two-month low of 4.377% while two-year yields touched 4.156%, the lowest since early December.
Next up will be the Conference Board's U.S. Consumer Confidence survey where analysts are wary of a repeat of the slump seen in the University of Michigan's equivalent poll.
Dallas Fed President Lorie Logan and Richmond Fed President Thomas Barkin speak later in the day with central bank watchers expecting them to echo the message that the Fed will be cautious in cutting rates.
European Central Bank board member Isabel Schnabel is also set to speak in London about the future of the central bank balance sheet.
Story Continues
Key developments that could influence markets on Tuesday:
* Conference Board's U.S. Consumer Confidence survey * Manufacturing survey from the Richmond Federal Reserve * European Central Bank board member Isabel Schnabel speaks * Dallas Fed President Lorie Logan and Richmond FedPresident Thomas Barkin speak
(By Stella Qiu; Editing by Christopher Cushing)
