Asian markets dip as tech bubble fears and US shutdown weigh on sentiment

Asian equities edged lower on Friday, capping off a volatile week marked by optimism over a Middle East ceasefire and booming AI investments, tempered by mounting concerns about a US government shutdown and possible overheating in the tech sector.

Despite record highs earlier in the week for some markets—as well as gold and bitcoin—investors are increasingly wary that valuations, particularly in tech, may have soared too far, too fast.

A major driver of this week’s tech optimism came from OpenAI, which signed multi-billion-dollar chip supply deals with South Korea’s Samsung and SK hynix, as well as US semiconductor giant AMD. These agreements add to the ongoing global investment boom in artificial intelligence, sending shares in AI-related firms surging.

Nvidia, a key player in the AI chip space, surpassed a $4 trillion market cap, underscoring the sector’s explosive growth. However, analysts warned that the rally may be approaching unsustainable levels.

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

Those worries have also contributed to a surge in gold prices, which briefly hit a record above $4,000 per ounce this week. Though prices have since dipped following developments in Gaza and a strengthening US dollar, the safe-haven appeal of gold remains strong amid market uncertainty.

Corporate credit analyst Alexandra Symeonidi of William Blair noted that “some market participants started to question the sustainability of the price momentum” in tech and are increasingly turning to hedges like gold.

On Wall Street, all three major indexes closed lower Thursday, and most Asian markets followed suit on Friday.

Hong Kong’s Hang Seng fell 0.9%

Tokyo’s Nikkei 225 dropped 1.0%

Shanghai slipped 0.3%

Other regional markets including Sydney, Singapore, Wellington, and Manila also declined

However, Seoul defied the trend, gaining over 1% thanks to a 6% jump in Samsung shares on AI chip optimism. Jakarta also posted gains.

Adding to investor unease is the prolonged US government shutdown, now expected to enter its third week. Political deadlock in Washington continues, with no sign of compromise between Democrats and Republicans.

Republican Senate Majority Leader John Thune suggested no weekend session was likely, dampening hopes of a quick resolution. Former President Donald Trump again blamed Democrats for the shutdown, vowing to cut government programmes if negotiations don’t progress.

CNN reported that Democrats are privately bracing for the shutdown to stretch several more weeks unless Republicans agree to extend expiring healthcare subsidies.

Key market figures as of 02:30 GMT (October 10, 2025):

Tokyo – Nikkei 225: 1.0% at 48,087.75

Hong Kong – Hang Seng: 0.9% at 26,501.69

Shanghai Composite: 0.3% at 3,923.11

Euro/dollar: at $1.1572 from $1.1558

Pound/dollar: at $1.3309 from $1.3294

Dollar/yen: at 152.90 yen from 153.14 yen

Euro/pound: at 86.95 pence from 86.94 pence

WTI crude: 0.1% at $61.59 per barrel

Brent crude: 0.1% at $65.27 per barrel

New York – Dow Jones: 0.5% at 46,358.42

London – FTSE 100: 0.4% at 9,509.40

As markets head into the weekend, all eyes remain on Washington’s budget impasse and signs of cooling in the high-flying tech sector.