Asian stocks fell on Thursday following another decline in technology companies and mixed results from Wall Street giants. Additionally, rising oil prices negatively impacted market sentiment.
Volatility in AI-Related Companies
AI-related companies have experienced significant volatility since reaching their peak in June. This volatility is due to concerns over high investment costs, timing for profitability, and rising debt service costs. A notable financial report from SpaceX, led by Elon Musk, on Tuesday bolstered major Wall Street stocks ahead of the important earnings season.
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Mixed Results and Their Impact on the Market
However, mixed results from Meta and Tesla have complicated the market situation once again. The electric car manufacturer Tesla reported a profit decline for the months of July to September and lowered its investment cost forecast. On the other hand, Facebook's parent company, Meta, has raised its forecast for AI-related expenses. Analysts emphasized that markets are concerned about rising costs but have also become sensitive to declines.
Disappointing results from Netflix and a weak forecast from American semiconductor equipment maker Lam Research added to the concerns. Companies like Microsoft, Amazon, and Alphabet are expected to report next week, while Apple and Nvidia are anticipated in November.
South Korean semiconductor companies, such as SK Hynix and Samsung, saw about a 3% price drop, while Japanese companies, Kioxia and Tokyo Electron, faced similar declines. The Seoul KOSPI index fell about 2%, and Tokyo's Nikkei 225 dropped 1.1%. Additionally, Hong Kong's Hang Seng index decreased by 2.4%, with major Chinese tech companies, including Alibaba, JD.com, and Tencent, experiencing significant declines.
Rising Oil Prices and Their Impact
Oil prices rose by more than 1% due to supply concerns. This price increase followed deadly attacks in Saudi Arabia, where Houthi rebels from Yemen attacked an Aramco oil field and King Fahd International Airport in Dammam. The United States has asked non-essential embassy staff and their families to leave Saudi Arabia. Brent crude oil prices rose by 1.3% to reach $110.28 per barrel.
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