Major US indexes also declined, led by sharp losses in tech and semiconductor stocks after warnings from Goldman Sachs and Morgan Stanley chiefs about the possibility of a pullback in equities.

The risk-off shift saw Treasury yields ease while the US dollar climbed to a four-month high against the euro, pressuring cryptocurrencies and stocks.

The sell-off reflected growing caution over higher borrowing costs and persistent market volatility, with some traders cutting exposure to high-risk assets.

At a Hong Kong investment summit, banking executives cautioned that global markets could face a correction of more than 10% over the next two years.

Chip maker Nvidia dropped 4%, while a broader semiconductor index also shed 4%. Shares of Palantir fell more than 8% despite posting strong quarterly results and issuing an upbeat forecast driven by demand for artificial intelligence services.

The stock has more than doubled this year, but regulatory filings showed “Big Short” investor Michael Burry has placed bearish bets on Nvidia and Palantir.

The S&P 500 slipped over 1% and the Nasdaq lost more than 2%, though the tech-heavy index remains up roughly 21% this year.

The Dow Jones Industrial Average fell 251 points, while MSCI’s global benchmark dropped 1.14%. Europe’s STOXX 600 index also edged lower.

A recent surge in AI-related deals has supported markets, including Amazon’s $38 billion cloud partnership with OpenAI, announced Monday, but caution resurfaced as traders reevaluated interest rate expectations.

The dollar strengthened amid fewer bets on near-term Federal Reserve easing, with uncertainty over a possible December rate cut.

The euro declined for a fifth session, reaching its weakest level since August, while sterling slipped after the UK finance minister signalled difficult fiscal decisions ahead.

US Treasury yields dipped as sentiment softened. Meanwhile, a government shutdown halted the release of Friday’s Bureau of Labour Statistics jobs report.

Oil prices also retreated, with US crude settling at $60.56 per barrel and Brent at $64.44, pressured by the stronger dollar.