Financial markets across Europe and Asia experienced broad declines on Tuesday as investors adopted a cautious stance ahead of pivotal U.S. employment and inflation reports that could significantly influence future interest rate decisions.
European benchmarks showed mixed but predominantly negative movement. Germany’s DAX index dropped 0.4% to 24,142.20 while Britain’s FTSE 100 slipped 0.3% to 9,722.23. France’s CAC 40 managed a marginal gain of 0.1%, reaching 8,129.43.
Asian markets faced more substantial pressure. Tokyo’s Nikkei 225 declined 1.6% to 49,383.29 despite the S&P Global Flash purchasing managers index showing improvement to 49.7 from November’s 48.7, though remaining below the 50-point expansion threshold. Chinese markets retreated following disappointing November economic indicators showing retail sales growth at just 1.3% year-over-year, the slowest pace since 2022.
Hong Kong’s Hang Seng dropped 1.5% to 25,235.41, while Shanghai’s Composite index fell 1.1% to 3,824.81. South Korea’s Kospi experienced the most significant decline, shedding 2.2% to 3,999.13 as technology shares, including SK Hynix (-4.3%) and Samsung Electronics (-1.9%), faced substantial selling pressure.
The market apprehension stems from heightened sensitivity to upcoming U.S. economic data and potential policy shifts. Investors are particularly focused on the Bank of Japan’s Friday meeting, where an interest rate hike is widely anticipated—a move that could disrupt global bond, currency, and cryptocurrency markets.
Adding to market concerns, iRobot shares plummeted 22% in premarket trading following the company’s Chapter 11 bankruptcy filing, compounding Monday’s 73% decline. The robotic vacuum manufacturer has struggled against intensifying competition despite assurances of uninterrupted device operations during restructuring.
Meanwhile, artificial intelligence stocks displayed volatility amid growing skepticism about whether massive investments in chips and data centers will generate adequate returns. Nvidia gained 0.7% while Oracle fell 2.7% and Broadcom dropped 5.6%.
Commodity markets also showed weakness with U.S. benchmark crude oil falling $1.08 to $55.74 per barrel and Brent crude declining $1.06 to $59.50. Currency markets saw the U.S. dollar weaken to 154.84 Japanese yen from 155.21, while the euro strengthened slightly to $1.1760 from $1.1755.