Traders Search for Meaning in Worst Week for Global Stocks Since April

When the US sneezes, the world catches a cold. The old maxim was on full display to end the week as global stocks head for their worst week in seven months. What started as a dramatic reversal in US shares spilled over into Asian markets, with selling fueled by concerns over lofty stock valuations and whether massive investments in artificial intelligence will pay off. The MSCI Asia-Pacific gauge slumped 1.7% Friday, led by South Korea and Taiwan, which both tumbled more than 3%.

The rout came after Nvidia delivered a blockbuster earnings report, triggering an initial rally in US shares and leaving investors scrambling to make sense of the sudden downward turn. Among the theories ranging from doubts about the Federal Reserve’s ability to cut rates to concerns over inflated valuations and technical dynamics that may have prompted fast-money funds to keep selling, Goldman Sachs partner John Flood pointed to a desire for cover against further losses.