Finance

Asian Markets Plunge Amid Valuation Fears: How Wall Street Warnings Impact Your Portfolio

Asian stocks fell, led by South Korea, as stretched valuations and Wall Street warnings triggered investor concerns.

November 4, 2025, 10:21 PM

The illuminated facade of Exchange Square in Hong Kong at night, displaying stock trading information on large blue LED screens.

The exterior of Exchange Square in Hong Kong, featuring trading data and the HKEX logo on digital billboards. By Yau Ming Low / Shutterstock.com.

Executive Summary

Asian stock markets experienced a broad selloff, extending overnight Wall Street declines, driven by investor concerns over stretched equity valuations.

South Korean shares led the retreat with a 4.1% loss, while Japan’s Nikkei slid 2.5%, significantly impacting SoftBank Group shares.

Prominent Wall Street executives, including CEOs of Morgan Stanley, Goldman Sachs, and JPMorgan Chase, have warned about the sustainability of current sky-high equity valuations.

The Story So Far

Asian stock markets are experiencing a broad selloff primarily due to investor concerns that equity valuations have become overextended and unsustainable. These fears are amplified by prominent Wall Street executives who have publicly questioned current market levels and warned of a potential significant U.S. stock market correction, with the current surge in generative AI enthusiasm drawing comparisons to the dot-com bubble era.

Why This Matters

The widespread selloff in Asian and global stock markets, fueled by investor concerns over stretched valuations and amplified by warnings from prominent Wall Street executives, signals a significant shift in market sentiment. This suggests a period of heightened volatility and investor caution, potentially leading to a broader re-evaluation of asset prices and a possible market correction in the near future.

Who Thinks What?

Investors are showing caution due to concerns over stretched equity valuations, leading to a broad selloff in Asian stock markets and extending overnight declines on Wall Street.

Prominent Wall Street executives, including the CEOs of Morgan Stanley, Goldman Sachs, and JPMorgan Chase, are publicly questioning the sustainability of current valuations and have warned of a heightened risk for a significant U.S. stock market correction.

Chris Weston, head of research at Pepperstone Group, observes a “sea of red” across broad markets, noting a lack of immediate catalysts for buying until events like Nvidia’s earnings report.

Asian stock markets experienced a broad selloff in early trading on Wednesday, extending overnight declines on Wall Street, as investor concerns over stretched valuations dampened confidence across the region. South Korean shares led the retreat, while Bitcoin and gold showed signs of recovery after recent losses. This downturn follows warnings from prominent Wall Street executives regarding the sustainability of current sky-high equity valuations.

Market Performance Overview

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.8%, with South Korean shares experiencing a significant 4.1% loss. Japan’s Nikkei stock index also slid 2.5%, notably impacting SoftBank Group shares, which plunged 10%. U.S. e-mini futures registered a 0.4% decline, coming after a 1.2% drop for the S&P 500 overnight.

Analyst Commentary and Underlying Concerns

Chris Weston, head of research at Pepperstone Group, characterized the situation as a “sea of red across broad markets,” noting a lack of immediate catalysts for buying until Nvidia’s earnings report on November 19. The market retreat from recent record highs is largely attributed to fears that equity valuations have become overextended.

Wall Street Warnings and AI Enthusiasm

These concerns have been amplified by Wall Street leaders, with the CEOs of Morgan Stanley and Goldman Sachs publicly questioning the sustainability of current valuations. Additionally, JPMorgan Chase CEO Jamie Dimon had previously warned of a heightened risk for a significant U.S. stock market correction within the next six months to two years. The current surge in generative AI enthusiasm across markets has drawn comparisons to the dot-com bubble era.

Currency and Commodity Movements

In currency markets, the U.S. dollar dropped 0.2% against the yen, trading at 153.41 following the release of minutes from the Bank of Japan’s September policy meeting. The dollar index briefly reached a five-month high of 100.25 before paring gains. The yield on benchmark 10-year Treasury notes edged lower to 4.0697%.

Bitcoin, which had fallen below $100,000 for the first time since June, rebounded to trade 0.2% higher at $100,499.70. Gold also attempted a recovery after three consecutive days of losses, rising 0.1% to $3,936.48 per ounce. The European single currency remained largely unchanged at $1.1484, while Brent crude was stable at $64.44 per barrel.

Market Outlook

The widespread decline in Asian equities, driven by valuation concerns and amplified by warnings from major financial institutions, signals a cautious investor sentiment across global markets. While some assets like Bitcoin and gold showed resilience, the overall “sea of red” suggests a period of re-evaluation for investors amid economic uncertainties and a lack of immediate positive catalysts.