Asian markets encountered a significant decline on Monday as traders reacted to the technology drop on Wall Street, driven by increasing concerns about investment in the field of artificial intelligence. Pressure on chip manufacturers and other companies related to artificial intelligence has intensified due to worries about rising inflation and costs, as well as the timeline for recouping large investments in this sector.
Severe Volatility in Asian Markets
Last week, severe volatility was observed in the markets, which generally concluded positively, but investors remain apprehensive ahead of the important earnings report season. Financial reports from major technology companies like Tesla and Meta will be released soon. Additionally, concerns about the massive debts of the company "CoreWeave," which operates in the "neocloud" sector, have contributed to market volatility, with the company's stock value dropping by about 30 percent this month.
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Impacts on Global Markets and Future Outlook
Investors are also closely watching the Federal Reserve's interest rate decision in the United States next week, where expectations for a second consecutive rate hike are likely to increase due to better-than-expected economic data. Higher rates typically disadvantage technology companies, especially those that require loans to finance their large investments.
On Wall Street, the Nasdaq index fell by more than 2 percent on Friday, with tech giants like Microsoft, Nvidia, AMD, and Amazon under pressure. According to Rodrigo Catril from the National Australia Bank, "The sell-off in U.S. stocks reflects a reassessment of the investment economy in the field of artificial intelligence, rather than a simple decline in demand." Markets are increasingly questioning whether future revenues can justify the massive costs and financing needed for data centers, chips, and power infrastructure.
This downward trend has also affected Asian markets. In Tokyo, the Nikkei 225 index declined due to the drop in shares of the technology investment giant "SoftBank" and other companies. Additionally, the Seoul stock exchange also fell due to further declines in shares of chip manufacturers like "SK hynix" and "Samsung." Cities such as Taipei, Shanghai, Sydney, Singapore, and Wellington also witnessed declines. The Hong Kong stock exchange was closed due to holidays.
Oil prices also dropped, but both major contracts remained above $100 per barrel after facing an increase of over 3 percent on Friday. The latest price drop indicates that supplies continue to flow out of the Middle East, despite pressures from Iran on the Strait of Hormuz and ongoing Houthi attacks on key Saudi oil facilities.
In the currency market, the euro has declined due to concerns about the French economy, which is affected by widespread protests.
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