A gauge for developing-world stocks was up about 0.4%, wiping out about half its gains as US equity indexes erased gains amid a rout in tech. A sister index tracking EM currencies also pared its advance significantly, with the South African rand and Mexican peso — bellwethers of risk appetite — erasing advances to lead losses for the day.

A tepid margin outlook from Cisco Systems Inc. helped spur volatility in global markets, which are also on watch for key US inflation data scheduled for Friday. All megacaps retreated, and an exchange-traded fund tracking software companies slumped 4.2%. Bitcoin and silver also sank.

Earlier in the day, currencies in the developing world had gotten a boost from fresh US unemployment figures. Continuing claims, a proxy for the number of people receiving benefits, nudged higher, which “still shows a relatively tough market for those who recently lost their jobs,” according to Dan Pan, Americas economist at Standard Chartered Bank.

Pan sees the soft dollar sentiment continuing, which is supportive for EM assets. Gauges of developing-world currencies and stocks are still up for the week, with the MSCI EM stock index hovering near a record high and the FX benchmark — a total return index that includes interest earned on those currencies — on track for its best week in more than six months.

News that Chinese regulators have advised financial institutions to rein in their holdings of US Treasuries, citing concerns over concentration risks and market volatility, is “haunting” the dollar, according to Juan Perez, senior director of trading at Monex USA.

“There is an underlying current of loss of faith in USD-denominated assets which is making EM-tender reach level highs,” Perez said.

Reporting by Kelsey Butler and Ray Ndlovu