Currency Surge and Market Jitters Amid AI Disruption

The Japanese yen and Swiss franc gained while technology stocks declined, driven by fears related to China's AI advances. The heightened demand for safe-haven assets, such as government bonds, led to a drop in U.S. Treasury yields. Stability concerns impact global currencies, following fluctuating U.S. tariff expectations.

On Monday, the Japanese yen and the Swiss franc bolstered their positions against major currencies, spurred by a selloff in technology stocks due to the introduction of a free open-source artificial intelligence model by a Chinese startup. DeepSeek's AI assistant launch challenges market predictions of burgeoning AI-driven demand for hardware and data.

The yen and Swiss franc strengthened, while yields on the U.S. 10-year Treasury note dipped to a one-month low, reflecting a move towards safe-haven assets. The S&P 500 dropped by 1.6%, heavily burdened by declines in technology stocks. AI chipmaker Nvidia saw a notable 14% fall, exacerbating market apprehensions.

Tensions over U.S. tariffs have emerged, affecting currencies like the Mexican peso and the Canadian dollar. Potential tariffs loom, with global economies closely watching upcoming major central bank meetings. As market attention shifts to inflation data releases, analyst expectations hint at increasing caution ahead of policy announcements.

(With inputs from agencies.)