Deutsche Bank strategists note that tech weakness extended from the Magnificent 7 and Apple into Asian markets, weighing on risk sentiment and US equity futures. However, gains in semiconductors, led by Micron, alongside strength in small caps and equal-weighted stocks, showed that the broader US market backdrop was more mixed than the headline tech selloff suggested.

Tech selloff spreads across Asia

"There seems to be a mini ice-age in Asia this morning with tech again selling off. The KOSPI is slumping -8.01% as I type with the Nikkei -4.54% lower. SoftBank is around -14% lower after the NYT suggested that OpenAI may delay its IPO until 2027."

"This follows a sharp decline for the Magnificent 7 (-2.54%) yesterday. The tech mega cap index moved deeper into correction territory after the news that Apple (-6.12%) would be raising the price of its Macs and iPads."

"Elsewhere in Asia the Shanghai Comp is -2.14% lower with the Hang Seng -1.87%. S&P 500 (-0.71%), NASDAQ (-1.45%) and European Stoxx (-0.79%) futures are also notably lower."

"That backdrop of strong data and more dovish Fed pricing meant most US stocks advanced even with some tech wobbles. However, the S&P 500 (-0.01%) ended up narrowly posting a fourth consecutive loss, as the tech sell-off we mentioned at the top dragged."

"It wasn't all bad news for tech as the Philly Semiconductor index rose +3.59%, with Micron surging +15.7% after Wednesday night's results. And more broadly, both the equal-weighted S&P (+0.67%) and the small-cap Russell 2000 (+0.71%) had solid days"

"Over in Europe, investors continued to price out the chance of further ECB rate hikes. In fact, the number of hikes priced by the December meeting fell to just 26bps by the close, down -3.2bps on the day. So that helped to push the STOXX 600 (+0.80%) to a record high by the close, alongside gains for the DAX (+1.03%), the CAC 40 (+0.55%) and the FTSE 100 (+0.65%). A large amount of that will likely reverse at the open this morning with the overnight sell-off."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)