This was not a routine risk-off week. Three separate shocks converged within 72 hours to produce one of the sharpest sell-offs in Asian markets this year. First, Broadcom's Q2 earnings guidance came in below expectations with AI semiconductor sales guided at $16bn against a $17.2bn consensus, raising the uncomfortable question of whether AI capex is actually peaking. Second, a stronger-than-expected US jobs report revived higher-for-longer rate fears, hitting growth stocks hardest. Third, Iran launched missiles at Israel overnight on June 7th, breaking a fragile ceasefire and sending oil back above $93 a barrel.

The epicentre was Asia. KOSPI collapsed 8.3% on the week with Samsung down over 10% and SK Hynix down 7.6%, a circuit breaker triggered at the open on Monday. Taiwan's TAIEX fell 4% with TSMC off nearly 3%. The Nikkei dropped 3.9%. The structural problem is one of concentration: Samsung and SK Hynix make up over 40% of the KOSPI, meaning one bad Broadcom print can halt trading in Seoul.

Looking at the data beneath the headline moves. US credit spreads barely moved with IG at 74bp and HY at 274bp, suggesting the bond market is not pricing a credit event but just an equity repricing. The 10Y-2Y spread compressed slightly to 42bp but the curve remains positive. VIX fell on the week to 15.4, which feels incongruous given the equity moves but reflects that the S&P itself only dropped 2.8%. The damage was concentrated in tech and EM Asia rather than broad US equities. Defensives told the real story with JPMorgan up 5.3%, Berkshire up 3.8% and Eli Lilly up 4.5%. The rotation out of AI and into quality value is very much underway. Watch the SPCX IPO next Friday as the market's reception will be a clean read on whether investors still believe in the AI infrastructure buildout.