20.10.202609:44 Forex Analysis & Reviews: Asia fails to back Wall Street rally, US 10-year yields climb again

Tech stocks came under renewed pressure today as AI sentiment stayed jittery ahead of this week's key earnings. South Korea's Kospi, a barometer for AI-related investment, tumbled by 4.2%, with chip heavyweight SK Hynix headed for its weakest close since April. The MSCI Asia-Pacific index lost 1.2%, diverging from Monday's tech gains on Wall Street. Nasdaq futures were down roughly 0.2%, and European equities looked set to open about 0.6% lower.

The on-the-ground picture is mixed. The Philadelphia semiconductor index rose by 1.6% on Monday, ending an eight-day losing streak — the longest since 2008 — and helping the Nasdaq 100 claw back some ground after its worst week since the tariff shocks of April 2025. The rebound was narrow: roughly 65% of S&P 500 names still fell, meaning that gains were concentrated in a handful of tech names rather than reflecting a broad risk-on rotation.

The bond market also remained under pressure. The 10-year US Treasury yield rose to about 5.13%, up 7 basis points during the US session, as demand for safe havens softened. French bonds weakened after weekend riots over rising living costs escalated into violence and looting; Paris has announced tighter security and business support measures, but high public debt and one of the eurozone's largest budget deficits limit fiscal firepower.

A key test is coming. Netflix reports today, followed by Tesla, Meta, and IBM tomorrow. Those results will show whether there is room for the rally to continue in the face of heavy AI spending and high rates. Note that elevated yields make financing more expensive, and oil keeps inflation worries alive — so don't be surprised if investors stay risk-averse.

As for commodities, gold was largely flat near $4,145/oz, while Brent held close to its five-month high around $111/bbl. Traders balanced the risk of fresh Houthi/Iranian attacks in the Strait of Hormuz against indications that Gulf flows remain broadly intact.

To sum up, markets are waiting on big tech earnings and are not ready to take large directional bets. In my view, until Tesla, Meta, and IBM report, expect continued nervous trading in tech; any disappointing read on AI capex could knock indices lower again. Gold is unlikely to get a clear bid in this environment, and oil will remain hostage to developments in Hormuz.

Regarding S&P 500 technicals, today's immediate task for buyers is to overcome the resistance level of $7,718. Doing so would signal upside momentum and open a move toward $7,737. Holding $7,756 would further strengthen the bulls' position. If the price falls amid weaker risk appetite, buyers should defend around $7,698. A break below that level would likely drive the index down to $7,679 and open the path to $7,656.