The weekend markets were quite nerve-wracking. U.S. stocks closed sharply lower on Friday, with tech stocks leading the decline. Topics related to OpenAI sparked a new wave of concerns about an AI bubble—heavy investments in data center construction are eating into corporate profits, which is indeed a warning sign. Interestingly, before the U.S. stock market opened on Monday, futures performed well, with the three major indices opening gap up, but ultimately all moved lower and closed in the same direction. The Nasdaq was even more exaggerated; it initially opened up 0.58% but was dragged down to close down 0.59%.

This trend immediately affected the entire Asia-Pacific region. The Japanese stock market opened with a sharp decline and showed no signs of recovery, instead continuing to fall. By 11:35 a.m. Beijing time, the Nikkei 225 index had fallen by 1.6%. South Korea was similarly brutal; after an opening gap down, it continued to fluctuate downward, with a decline reaching 1.95% at the same time. The Australian stock market managed to resist a bit in the morning but also succumbed to a plunge in the afternoon, though the decline was relatively mild at only 0.57%.

Hong Kong stocks were under the most pressure. The night before, Chinese concept stocks on Nasdaq performed poorly, with the Golden Dragon Index plunging 2.17%, directly impacting Hong Kong stocks. The Hang Seng Index broke below the six-month moving average under the dual pressure of Chinese concept stocks and Asia-Pacific markets. After opening with a gap down of 0.32% in the morning, it never recovered and closed sharply lower at 1.91% in midday trading. The tech sector fared even worse, with the Hang Seng Tech Index dropping 2.41%. It had already fallen below the annual moving average in the morning and is now close to a critical support level in the downward trend.

The A-shares market isn’t looking much better. The Shanghai Composite Index opened 0.17% lower and continued to decline throughout the day, with no significant rebound. It closed down 1.22% at 3,820 points at midday. The lowest point during the session was 3,816.06, setting a new low since November 21 (the day's low was 3,816.58). This level is very critical—if it continues to break downward, the index will exit the consolidation zone and officially enter a downtrend.

However, from a technical perspective, the situation may not be as bleak as it seems. The MACD indicator on the intraday chart has already shown signs of bottom divergence, which often signals a potential rebound. More importantly, the stock markets in Japan and South Korea have already begun to stabilize; although there is no rebound yet, at least they are not continuing to fall. Plus, today’s decline was on decreasing volume, with only 1.12 trillion in turnover, 60.6 billion less than yesterday morning, indicating that there isn’t much panic selling in the market.

Looking at the bigger picture, the year-end and beginning of the new year typically bring a wave of cross-year trading. Before this rally truly kicks off, there is usually a deep dip or shakeout, followed by a jump. Today’s movement might be part of that process. If the market can stabilize and rebound in the afternoon, it could mark a genuine turning point.