Tech stocks struggle on AI spending worries and elevated yields
SMH•Asian stocks slipped and were poised for a second straight weekly drop as investors weighed elevated energy prices, bond market volatility and the sums needed to fund AI investment. Brent crude was at $103.70 a barrel, while the U.S. 10-year Treasury yield was 5.226%.
1. Stocks under pressure
Asian stocks fell on Friday, with MSCI's broadest index of Asia-Pacific shares outside Japan down 0.16% and set for a weekly decline of more than 1%. Japan's Nikkei fell more than 1%. Tech stocks led U.S. indexes lower overnight after a report that OpenAI's annualized revenue was $20 billion below what the company had previously signaled.
2. AI funding concerns
Investors weighed expected fundraising by SpaceX, Broadcom and Oracle to buy high-end AI chips. Firmus, an Australian data centre operator backed by Nvidia, shelved its planned $5 billion IPO, citing market volatility and conditions, and said it would pursue private fundraising instead. Strategists said elevated long-term yields and corporate issuance were making capital more expensive and selective.
3. Oil and bond markets
Brent crude traded at $103.70 a barrel after rising more than 4% in the previous session, as the Middle East war fueled inflation concerns. Investors continued to scrutinize French debt, while the U.S. 10-year Treasury yield was steady at 5.226%, near a 24-year high reached Wednesday.
