Asia Pacific investors are bracing for a jump in volatility amid heavy selling after US stocks plummeted in overnight trading. Although there was no particular trigger for the meltdown it appears investors were locking in gains ahead of a number of key market events over the next 36 hours.

Tech stocks and market darlings were most affected. The sell down comes ahead of the US quarterly corporate reporting season which gets into full swing tomorrow night with Citigroup, JP Morgan and Wells Fargo. The highest ever US earnings expectations and potential macro negatives are the likely sell drivers. The tech heavy Nasdaq index shed 4%.

Industrial metals were sucked down by the risk off mode, and gold rose. Currency markets were curiously calm, with a slight weakening of the US dollar. Even more remarkably bond yields dropped, despite stock investors’ interest rate concerns and tonight’s read on US inflation that may see new seven year highs for bond yields.

Regional markets are more defensively positioned than the US and this may dull the impact today. However futures markets are pointing to opening tumbles of 1.5% to 3%. Trade disputes remain a key concern and tomorrow’s release of the China trade balance for September may bring the worries into sharp focus.