Asian shares pull back from record highs as tech sector jitters drive investors toward safe haven bonds

Cisco Systems, Inc. CSCO reported a quarterly adjusted gross margin that fell below market estimates, citing surging memory chip costs as the primary driver. The announcement on Friday triggered an immediate and broad selloff across the technology sector, leading to a significant repricing of risk in both tech-related and cyclical assets, including transportation companies. This earnings shock has fundamentally altered market positioning as investors react to the rising cost environment for hardware manufacturers.

The market reaction was swift, with the Nasdaq Composite sliding approximately 2 percent. Cisco shares themselves plunged about 12 percent, a decline that erased nearly $40 billion in market capitalization. The weakness spread to other industry giants, resulting in a sharp drop for Apple Inc. AAPL. This volatility pushed Asian shares off their recent peaks, as the MSCI Asia-Pacific ex-Japan index retreated by 0.6 percent. Regional indices such as the Nikkei in Japan JP and the Hang Seng in Hong Kong HK saw downward pressure, alongside markets in China CN, Australia AU, and New Zealand NZ.