Technology losses weigh on global stocks as dollar slips
CoreWeave fell 13% amid scrutiny of AI financing, while Indonesian equities suffered their steepest decline since 1998 following an MSCI decision.
Asian stocks retreat as AI financing worries weigh on technology
US equity futures rose as cheaper oil supported bonds, while political uncertainty in France put pressure on the euro.
Japan's Nikkei lost 2.0% and South Korean equities declined 1.6% on October 19 as investors worried about funding for artificial intelligence infrastructure ahead of corporate earnings. Elsewhere, falling oil prices supported US stock futures and government bonds.
The Nikkei's decline followed a weekly loss of 5.4%, while South Korea had shed more than 14% in the preceding week. MSCI's broadest Asia-Pacific index excluding Japan slipped 0.3%. Futures on the S&P 500 advanced 0.5%; Nasdaq futures gained 0.8%.
My Bui, an economist at fund manager AMP, said investors feared AI revenue would fail to recoup upfront spending and aging infrastructure could require write-downs. Bui also said higher government yields and widening corporate credit spreads were raising borrowing costs.
Oil retreated after President Donald Trump moved to waive some Russian sanctions, although he subsequently said no final decision had been reached. Brent futures dropped 1.6%, reaching $108.06 a barrel; US crude futures declined 0.7%, reaching $100.70 a barrel.
Geopolitical tensions and investors moving out of equities into safer assets extended gains in sovereign bonds. The yield on 10-year Treasuries decreased 3 basis points to 5.0645%. Lower yields also supported gold, which advanced 0.4% to $4,181 an ounce.
In Europe, French political uncertainty weighed on stocks and the euro. EUROSTOXX 50 futures declined 0.4% and DAX futures slipped 0.3%, while FTSE futures were unchanged. The euro weakened 0.2% to $1.1212.