Kospi slides as AI chip worries return; UK jobless rate falls to 4.7%

• US (Monday's close): The Nasdaq Composite ended 1.11% higher at 26,430.89 and the S&P 500 gained 0.41% to 7,690.73. The Dow slipped 0.07% to 51,966.03. Futures are the only live guide to today's US session: S&P 500 futures are up 0.08% and Nasdaq 100 futures are down 0.23%.
• Europe (Monday's close): The fall was broad. The FTSE 100 lost 1.08% to 10,764.69, the DAX 1.18% to 25,319.77, the CAC 40 1.11% to 7,868.05 and the Euro Stoxx 50 0.96%.
• Asia (trading now): The Kospi is down 4.23% at 5,523.86. The Nikkei 225 is 1.54% lower at 63,919.60, the Hang Seng 1.37% lower at 23,855.97 and the Shanghai Composite 0.69% lower. Taiwan closed down 1.13%.

Asia's fall was about AI financing. Monday's US gains were a relief bounce in AI-linked stocks after last week's sell-off, which was driven by fears that higher borrowing costs would cut spending on AI infrastructure. Asia went back to that worry, with fresh questions about how the AI build-out is funded and whether it will pay off. Korean chipmakers took the biggest hit, with SK Hynix and Samsung Electronics leading the fall. A weak market debut for AI data-centre company Elice Group, which opened below its IPO price, added to the gloom. Chipmakers make up a large part of Korea's index, so it falls hardest when the AI story wobbles. Japanese electronics makers also fell. China's central bank left its benchmark lending rates unchanged, as expected, which gave the region no help.

Europe's Monday slide had its own causes. Banks led the fall after a report that the Bank of England's banking regulator, the Prudential Regulation Authority, is examining whether Barclays traders misrepresented illiquid private-credit loans so the bank could hold less capital. Barclays fell 3.50% and NatWest 2.70%. Anglo American (-4.05%) and Glencore (-3.31%) also fell sharply, with no clear trigger. Worries about the Middle East added to the selling. Houthi rebels claimed attacks on Saudi oil and airport sites, an adviser to Iran's supreme leader warned that any renewed fighting would become a regional war, and US embassies across the region issued threat alerts.

Borrowing costs are pulling against the tech rebound. The US 10-year yield rose 3.8bp to 5.136%, helped up by oil-driven inflation worries, and Brent is at $109.87. When long-term yields rise, profits expected years from now are worth less today. That hurts richly valued growth stocks most.

Wall Street's gains came from a narrow group of stocks. On PrimerIQ's count, 3,484 US stocks fell on Monday and 2,538 rose, even though the indices closed higher. The sector split points the same way: consumer discretionary rose 1.78% and technology 1.36%, while rate-sensitive utilities fell 2.01% and real estate 1.16%. Our breadth was weaker still in Europe, with an advance/decline ratio of 0.54, and in the UK at 0.55. Investors are not rushing to safety, though. The VIX fell 1.55 points to 18.44, the MOVE index of bond volatility was little changed at 101.30, gold is down 0.31% at $4,147.20 and the dollar index is down 0.20%. This looks like stress in particular sectors and regions rather than a wholesale retreat from risk.

The 07:00 UK labour market figures were stronger than expected on the headline. Unemployment fell to 4.7% in the three months to August from 4.9%, when forecasts had expected it to stay at 4.9% or rise. Regular pay growth was 3.7%, slightly above the 3.6% expected, while total pay growth eased to 3.7%, against 3.8% expected. Beneath the headline, hiring looks weak. The claimant count rose by 30,300, well above the roughly 19,400 forecast, vacancies fell to 691,000, and payrolled employees rose by a provisional 13,000 in September. Sterling firmed: GBP/USD is up 0.16% at 1.3357 and EUR/GBP is at 0.8407. A stronger jobless rate alongside slightly firmer regular pay gives the Bank of England less reason to hurry with rate cuts.

Still to come today are Germany's October ZEW survey of investor sentiment, where the current-conditions reading is expected to rise and expectations to fall, and Hungary's interest-rate decision. No major US data is due. The Federal Reserve's next decision is next week.

Nothing material on our calendar has reported yet. The batch of US results before Wall Street opens is the day's first test. Monday's standout was Disc Medicine, up 38.86% after its bitopertin drug met all its main and secondary goals in a late-stage (Phase III) trial.