Hedge fund demand for leverage drives Wall Street equities revenue to record highs

Asian stock markets slipped on Thursday following a rally on Wall Street, driven by robust profit reports from major companies. SpaceX, Capital One Financial, and other large corporations contributed to the uptick in U.S. stocks. The Nikkei 225 in Tokyo fell 1.6% to 63,595.58, while the Kospi in South Korea dropped 2.6% to 5,586.89.

Big tech companies like SoftBank Group and Tokyo Electron suffered significant losses, down 5.6% and 5.9% respectively. South Korean memory chipmakers, including Samsung Electronics and SK Hynix, also experienced declines, with the former down 3.9% and the latter 4.7%. AI-related stocks faced pressure due to concerns over potential slowdowns in data center construction as borrowing costs rise.

Hong Kong's Hang Seng index decreased 2.7% to 23,003.17, and China's Shanghai Composite index fell 0.9% to 3,679.86. Australian stocks, represented by the S&P/ASX 200, ended the day 0.3% lower at 8,803.20. The U.S. stock market had surged earlier in the week after strong profit reports from companies like SpaceX, Capital One Financial, and Tesla.

Tesla rose 3.4% after reporting a stronger profit than anticipated, and Elon Musk hinted at a possible merger between Tesla and SpaceX. Meanwhile, Netflix saw a 5.3% decline despite beating analyst expectations, as investors questioned the sustainability of its momentum. In the bond market, the yield on the 10-year Treasury note rebounded to 5.12%, edging higher from an early dip.

Oil prices also rose, with Brent crude increasing 1.6% to $110.55 per barrel, fluctuating between $97 and $112 due to uncertainty surrounding the ongoing conflict with Iran.