Watson

• Market weakness is currently impacting the Nasdaq and Asian technology sectors, placing leveraged retail and momentum strategies at high risk of liquidation. • Analysts identify memory stocks as the most vulnerable due to extreme gains, while quality AI infrastructure at reset multiples is viewed as a primary opportunity. • Investment banks report that the AI capital-expenditure boom is driving a multiyear financing cycle, fueling equity issuance, mergers, and debt-market activity.

• MSCI’s Asia Pacific gauge fell 2.5% to a two-month low as investors rotated away from technology stocks, leading to a significant downturn in regional benchmarks. • Japan’s Nikkei 225 faced its worst session since March, while TSMC shares dropped 5% despite a solid earnings outlook, weighed down by higher spending forecasts. • The decline was driven by semiconductor losses and the heavy weighting of technology companies in export-heavy indices, offsetting stability in Hong Kong and mainland China.

• U.S. equities rose following softer producer inflation and strong corporate earnings, while Asian markets saw a sharp reversal in semiconductor stocks. • Memory-chip manufacturers and equipment suppliers underperformed despite AI demand, though Hong Kong gained from a rotation into Chinese technology. • South Korean regulators are preparing measures to address controversies surrounding leveraged ETFs tied to industry giants Samsung and SK Hynix.