Seoul shares start higher despite Wall Street losses, AI concerns

U.S. stock futures remained relatively stable on Tuesday evening after a disappointing performance by chipmakers left Wall Street lower. Investors were holding off on making decisions until the September consumer inflation report was released, which could provide insight into the Federal Reserve's future interest-rate plans. The S&P 500 Futures remained unchanged at 7,855.75 points, while the Nasdaq 100 Futures stayed steady at 30,793.75 points at 20:34 ET. Dow Jones Futures experienced a slight decline of 0.1%, settling at 51,894.0 points.

Throughout the day, semiconductor stocks continued to face pressure, with the Philadelphia Semiconductor Index slipping for the fifth time in a row. Micron Technology's shares dropped 3.6%, and Applied Materials saw a nearly 7% decline. Concerns surrounding increased competition from China's ChangXin Memory Technologies and uncertainty over returns from AI investments contributed to the negative sentiment.

Broadcom's CEO, Hock Tan, even likened some investments in the sector to casino gambling, further fueling worries about inflated valuations and speculative spending.

Investors were also evaluating the mixed third-quarter results from major U.S. banks at the beginning of earnings season. Citigroup dropped 5.6% despite surpassing profit expectations, while Goldman Sachs fell 0.2%. Wells Fargo experienced a 3.1% decline after its net interest income fell short of estimates, and JPMorgan declined 0.9% after reporting a rare quarterly profit shortfall.

As the earnings season kicked off, attention turned to the upcoming consumer price index report on Wednesday, which could shed light on the Federal Reserve's potential policy changes. Economists anticipate that September's data will offer a clearer picture of inflationary pressures, as heightened energy costs and geopolitical tensions complicate the outlook.

Oil prices, government bond yields, and developments in the Middle East continue to impact market sentiment. Brent prices surged in Asian trading on Wednesday to near $107 per barrel, raising concerns that inflation may persist, limiting the central bank's ability to ease monetary policy. Traders widely expect the Federal Reserve to keep interest rates steady for now, although a rate hike in December remains a possibility.