Kok Weng Tang @coolingman: "Market Turmoil: Tech Selloff, Geopolitics..."

Malaysia

Market Turmoil: Tech Selloff, Geopolitics and Policy Risks Shake Investors Global markets faced heavy pressure today as a combination of disappointing tech earnings, rising geopolitical tensions, and macroeconomic concerns triggered a broad risk-off move. 1. $MSFT (Microsoft) Leads Tech Sector Lower Microsoft shares plunged around 11%, marking its worst single-day performance since March 2020 and dragging the entire technology sector down. Despite beating expectations on both revenue and earnings, investors were alarmed by several underlying issues highlighted by Yahoo Finance: ✳️Azure cloud growth slowed to 39%, down from 40% in the previous quarter ✳️Capital expenditure surged to USD 37.5 billion, far exceeding analyst estimates ✳️Gross margin fell to a three-year low ✳️Forward operating margin guidance came in below expectations The market reaction suggests growing concern that cloud growth is peaking while AI-related investments are becoming increasingly capital-intensive. 2. Federal Reserve Holds Rates Steady The Federal Reserve kept the federal funds rate unchanged at 3.5%–3.75%, as inflation remains above the central bank’s target. The NSDQ reported that policymakers continue to signal caution, reinforcing expectations that monetary conditions will remain tight for longer. 3. Geopolitical Risks Escalate Political uncertainty also added to market volatility: ✳️Former President Trump reiterated his controversial proposal to acquire Greenland, while threatening to impose tariffs on eight NATO countries, including Denmark. ✳️He also warned of a 200% tariff on French wine and champagne. ✳️Meanwhile, rising fears of a potential military confrontation with Iran pushed gold and oil prices higher, reflecting increased demand for safe-haven assets. 4. US Trade Data Deteriorates Macroeconomic data further weighed on sentiment: ✳️The US trade deficit in November nearly doubled, reaching USD 56.8 billion. ✳️Around one-third of the widening deficit came from trade with the European Union, highlighting increasing external imbalances. Together, these factors have significantly increased uncertainty, reinforcing investors’ growing aversion to risk in both equities and growth assets. $NVDA (NVIDIA Corporation) $UNH (UnitedHealth) $TSLA (Tesla Motors, Inc.) $META (Meta Platforms Inc) $SPX500