Markets lashed by tech rout as earnings fan AI fears
Poorly received earnings from US titans are driving concerns about the AI investment boom.
On October 30th, technology stocks continued a downward trend as disappointing earnings from major US tech companies amplified fears surrounding the rapid investment in artificial intelligence (AI). Bitcoin prices also plummeted following a significant hacking incident at Binance, the world's largest cryptocurrency exchange, which analysts deemed potentially the most severe cyberattack ever recorded.
Kathleen Brooks, research director at XTB trading group, stated, "The end of the week is dominated by a continuation of the recent AI sell-off on disappointing earnings, and concerns about the safety of crypto."
Falling tech stocks resulted from poor earnings reports from Amazon and Intel. Amazon shares fell 5.5% after missing expectations for profits and revenue, while Intel declined more than 27% due to a slowdown in the personal computer market driven by rising memory chip prices. Shares of AI semiconductor firms also dropped, with Nvidia down 3.2%, Micron Technology falling 5.7%, and AMD experiencing a 10.3% decline.
Alphabet shares, parent company of Google, slipped an additional 1.5% after heavy selling on October 29th wiped billions of euros off its value. The Nasdaq Composite index, heavily weighted with tech stocks, fell 2.3% at the opening bell. Experts predict the AI trade will not recover by Friday, with traders shifting focus to non-tech sectors and safe havens.
In contrast, the FTSE 100 index in London edged higher in afternoon trading, buoyed by strong earnings from pharmaceutical giant AstraZeneca and energy major BP. However, British bank NatWest shares fell more than 8% following a decline in its third-quarter net profit, lagging behind rival banks.
Eurozone stock markets varied amidst mixed growth data within the economic bloc. Tech-heavy South Korean Kospi index closed down 3.5% for the week, while Tokyo markets ended with a 2% loss.
The focus is also shifting towards the upcoming US midterm elections on November 3rd and their potential impact on the final two years of Donald Trump's presidency. Oil prices rose around 2% on October 30th due to renewed supply concerns following Iran's claim that four tankers were hit by mines in the Strait of Hormuz. ExxonMobil shares increased 1.8% after reporting that its third-quarter profits more than doubled to US$15.4 billion (S$19.7 billion) due to higher oil prices and refining margins resulting from the US-Iran conflict.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
