On May 22, 2025, Asian stock markets experienced a downturn, mirroring the previous day’s losses on Wall Street. The decline was primarily driven by rising U.S. Treasury yields and concerns over the technology sector’s performance.
Key Factors Influencing the Decline
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Rising U.S. Treasury Yields: A weak auction of 20-year U.S. Treasury bonds led to a spike in yields, with the 10-year reaching 4.595% and the 30-year hitting 5.09%, the highest since October 2023. This increase in yields has raised borrowing costs, potentially slowing economic growth.
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Tech Sector Weakness: Major technology companies faced significant losses. Nvidia’s shares fell 1.9% following CEO Jensen Huang’s criticism of U.S. export restrictions to China. Palantir dropped 4% below its buy point, and Tesla declined 2.7% despite Elon Musk’s reaffirmation of his long-term commitment to the company. U.S. Fiscal Concerns: Moody’s recent downgrade of the U.S. credit rating, citing unsustainable debt levels and proposed tax cuts, has added to investor anxiety. The proposed tax-cut law, facing internal GOP divisions, could potentially increase the federal debt by up to $5 trillion.
Impact on Asian Markets
Asian markets mirrored these concerns, with major indices recording losses. The technology sector, being highly sensitive to interest rate changes and global demand, led the decline across the region.
