US equities slumped on Tuesday, dragged down by renewed concerns about an overvalued tech sector and an unsustainable fiscal outlook. The S&P 500 and Nasdaq 100 both tumbled more than 1%, while the Dow plunged by 400 points. Heavyweights Nvidia and Qualcomm fell around 3% apiece amid lingering scepticism over the long-term returns from artificial intelligence, prompting investors to reassess their sizeable positions in both software and hardware.

Meanwhile, the South African rand weakened sharply against a stronger US dollar as markets anticipated key US economic data that may influence this month’s Federal Reserve decision. At 13h14 GMT, the rand traded at around R17.7350 to the dollar, down roughly 0.60% from Monday’s close. Sentiment on the Johannesburg Stock Exchange mirrored this weakness: the Top‑40 index fell by 1.10%, and the yield on South Africa’s benchmark 2035 government bond climbed 5.5 basis points to 9.645%.

In London, the FTSE 100 slid 0.90% to 9 117 - the lowest level since 8 August - on mounting worries about the UK’s financial stability, which weighed heavily on real estate, utilities, banking, and retail stocks. Meanwhile, Britain’s long-term borrowing costs hit 27-year highs, placing Chancellor Rachel Reeves under pressure ahead of the autumn Budget. Policymakers may now be forced to weigh tax increases or spending cuts to meet their commitment to reducing debt within five years.

European equities fared poorly too, dragged down by a broad sell-off across global markets and rising long-term borrowing costs. Eurozone inflation edged up to 2.10% year-on-year, while core inflation held steady for the third consecutive month, fuelling persistent worries about services inflation. The data coincided with record levels of European bond issuance -particularly in the UK and Italy - adding further strain to the long end of the yield curve.

In Asia, the Japanese yen slipped past JPY 147.5 to the dollar - near a one-week low - as traders awaited upcoming wage data that could influence domestic monetary policy. Markets remain divided on the timing and pace of potential Bank of Japan rate hikes, despite Governor Kazuo Ueda signalling rising wages ahead of further tightening.

Chinese markets retreated too: the Shanghai Composite fell 0.45% to 3 858, while the Shenzhen Component tumbled 2.14% to 12 554, ending a three-day rally as investors locked in profits. Focus also turned to the Shanghai Cooperation Organisation summit in Tianjin, where China is seeking to position itself as a global mediator amid escalating trade and geopolitical tensions.

On the commodities front, WTI crude oil futures rose over 1% to above US$65 per barrel, extending gains from the previous session amid escalating fears of further supply disruptions due to the Russia-Ukraine conflict. Meanwhile, gold prices surged to a record high - surpassing US$3 510 per ounce - driven by growing expectations of a US rate cut and a weaker greenback.