When the Bubble Blinks: Navigating a Fragile Week in Global Markets

Ahmad Mortazavi
Nov 22, 2025
5 min read

🌍Big Picture

Global markets entered a fragile phase this week as concerns about an emerging AI bubble sparked a broad retreat from risk assets. What started as concentrated selling in semiconductor and mega-cap technology shares quickly broadened into a synchronised global correction, marking the sharpest multi-region pullback in several months. This reversal unfolded despite a relatively stable macroeconomic backdrop. Inflation is cooling across major economies, long-term yields are anchored, and central banks have signalled patience rather than further tightening.

Yet this supportive environment was overshadowed by a reassessment of valuations. AI-linked equities, after months of outsized gains, showed their first signs of exhaustion, prompting investors to scale back exposure and seek more balanced allocations. Europe mirrored this shift, with technology and cyclical shares leading declines as the earlier optimism faded. Asia saw some of the sharpest losses globally, particularly across China, Japan and South Korea, where semiconductor sentiment deteriorated abruptly.

The defensive tone extended beyond equities. Oil extended its multi-week decline on oversupply concerns, while crypto markets recorded one of their steepest sell-offs of the year amid forced liquidations. Gold, by contrast, remained firm near record highs, underscoring the rise in demand for defensive hedges.

This week reflects a market not reacting to deteriorating fundamentals, but recalibrating after a phase of stretched valuations. Investors are stepping back from speculative themes and rotating toward more diversified, valuation-supported opportunities as the global cycle enters a new, more balanced phase.

📊 Assets at a Glance

Equities

Global equities came under significant pressure this week as AI-bubble fears triggered a broad sell-off across major regions. In the U.S., all three major indices declined, with the S&P 500 down 2%, the Nasdaq falling 2.7%, and the Dow losing 1.9%, driven largely by heavy profit-taking in mega-cap tech and semiconductors.

Europe mirrored these losses, with the STOXX 600 falling 2.2%, its weakest weekly performance since midsummer, as technology names across the region dropped 5–6% amid a global de-risking from AI-linked stocks.

Asia experienced some of the sharpest declines globally: the MSCI Asia ex-Japan retreated 3%, Hong Kong’s Hang Seng dropped 3.9%, and China’s CSI 300 fell 3.9%, while Japan’s Nikkei 225 slid 3% as semiconductor sentiment deteriorated rapidly.

Emerging markets moved in the same direction, with the MSCI EM Index falling 2–3% and fund flows turning negative for the week.

Fixed Income

Despite the turbulence in equities, bond markets remained remarkably stable. The U.S. 10-year Treasury yield eased toward 4.06%, supported by rising demand for safe assets and increasing expectations that the Federal Reserve could begin cutting rates sooner than anticipated.

Across Europe, government bonds also strengthened. German Bund yields fell toward 1.8%, while UK Gilt yields drifted lower to approximately 3.85% amid softer economic indicators and a broad rotation toward safety.

Credit markets showed resilience, with spreads widening only modestly despite the risk-off tone.

Commodities

Oil extended its multi-week decline as oversupply concerns outweighed geopolitical tensions. Brent settled near $62.5/barrel, and WTI traded around $58–59, marking the third consecutive weekly drop.

By contrast, gold remained firm at approximately $4,060/oz, supported by lower real yields and a rise in defensive positioning as investors sought stability during the tech-led market correction.

Industrial metals such as iron ore and copper softened across Asian markets due to weaker demand from China.

Currencies

The U.S. dollar index hovered around the 100 level, reflecting a balance between rate-cut expectations and safe-haven demand. The euro held in the $1.16–1.17 range, supported by falling volatility and improving current-account conditions. The Swiss franc strengthened to a six-year high against the euro, while the Japanese yen weakened to nearly ¥157 per dollar, its lowest level in ten months, reflecting diminished safe-haven demand and ongoing policy divergence.

Emerging-market currencies, however, were mixed: the Mexican peso edged higher, while the Turkish lira and the South African rand weakened as global risk appetite deteriorated.

Crypto

Crypto markets suffered one of their most volatile weeks of the year. Bitcoin plunged to nearly $80,600, its lowest level since April, as leveraged crypto hedge funds unwound positions. Ethereum traded near $4,300, also under pressure.

Volatility spilt into EM crypto exchanges, with heavy liquidations reported in India, Brazil and Turkey.

📅 Key Events Next Week

Mon 24 Nov — U.S. Chicago Fed National Activity Index

Weak reading: Confirms economic cooling; supports lower yields and risk-off tone.
Strong reading: Raises concerns about renewed inflation; USD may firm; equities remain pressured.

Tue 25 Nov — Germany IFO Business Climate (Nov)

Improvement: Signals green shoots in manufacturing; could cushion European equity sentiment.
Weak result: Reinforces sluggish demand; Bund yields fall; euro softens.

Wed 26 Nov — U.S. Durable Goods Orders (Oct)

Soft print: Confirms capex cautions; keeps volatility elevated in tech and cyclicals.
Strong print: Offers temporary relief but risks reigniting inflation expectations.

Thu 27 Nov — Eurozone M3 Money Supply + ECB Speakers

Slowing M3: Strengthens the case for early ECB cuts; supportive for European bonds.
Stronger M3: Pushes out rate-cut expectations; EUR strengthens.

Fri 28 Nov — Japan Industrial Production & China PMI

Positive data: Offers a much-needed lift to Asian sentiment.
Weak data: Dampens EM optimism; yen may firm as markets hedge risk.

💡 Investment Idea: Prosus N.V. (AMS: PRX)

Amid this week’s market correction, attention is turning toward opportunities that offer long-term growth potential without the valuation risks seen in overheated sectors. Emerging Markets are increasingly well-positioned to play this role. A weaker U.S. dollar, stabilising global yields, and improving liquidity conditions are helping capital return to Asia, Latin America and other higher-growth regions.

iShares MSCI Emerging Markets IMI UCITS ETF (EMIM) provides a comprehensive and efficient way to access this landscape. Tracking an index of over 2,500 companies across China, India, Taiwan, Brazil, South Korea, Mexico and beyond, EMIM blends large-, mid- and small-cap exposure into a single, low-cost (≈0.18% TER), UCITS-compliant vehicle ideal for UK and European investors.

Valuations across EM remain compelling, often ranging from single-digit to low-teens P/E multiples — significantly below U.S. markets. Structural growth drivers, from digital adoption to favourable demographics, support a multi-year expansion that is not overly reliant on speculative themes. While short-term volatility is inherent in EM investing, EMIM’s breadth helps smooth country-specific shocks, making it a resilient tool for long-term portfolio construction.

In a market where developed-world equities are correcting and the AI trade is being reassessed, EMIM offers a practical, diversified, and forward-looking way to participate in global growth.

Prepared by the Scientia Capital Management Team. This publication is based on verified market data and analysis. The views expressed are for informational purposes only and do not constitute investment advice. Scientia Capital Management combines market expertise with AI-driven intelligence to empower investors worldwide.