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AI concerns shake Asia ahead of Fed decision and tech earnings

Concerns that artificial intelligence investment may not justify elevated valuations pushed technology stocks lower on Tuesday and continued to unsettle Asian trading on Wednesday. Wall Street closed mixed, with the Dow advancing while the Nasdaq 100 extended its slide, and Asian markets were divided as steep losses in Korea and Japan contrasted with gains in Australia, Hong Kong and mainland China. Oil prices climbed after renewed missile attacks involving Iran heightened fears over Middle Eastern supply risks. Investors will look to the Federal Reserve’s interest rate decision on Wednesday, alongside quarterly results from Microsoft and Meta Platforms, for further direction.

  • Data
  • Autore Shane Strowmatt, Senior Investment Writer
  • Tempo di lettura 5 minuto

Mixed markets
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Asian equities fell sharply on Wednesday as concerns over lofty artificial intelligence valuations and the returns on heavy technology investment deepened ahead of earnings from Microsoft and Meta Platforms. Korea’s Kospi fell 7%, while Japan’s Nikkei 225 lost 1.8%. SK Hynix shares fell 9% despite a more than sixfold rise in quarterly operating profit. Other markets in the region posted gains: Australia’s S&P/ASX 200 gained 1%, Hong Kong’s Hang Seng Index rose 1.2% and mainland China’s CSI 300 increased 1%.

Oil rises as Iran tensions escalate

Oil prices rebounded after Iran launched another wave of ballistic missiles at US forces in the Middle East, renewing concern about disruption to regional supplies. Brent crude oil futures rose 3% to USD 84.54 per barrel and West Texas Intermediate (WTI) futures gained 3.5% to USD 82.04, after both benchmarks had fallen about 15% over the preceding three sessions. The rally was reinforced by an estimated 3.3 million-barrel decline in US crude inventories last week and reports that OPEC+ may halt planned output increases for three months from October.

Dow gains as Nasdaq correction deepens

US equities ended mixed on Tuesday, with the Dow Jones Industrial Average rising 1% to 52,747.32 points and the S&P 500 adding 0.2%, while the Nasdaq 100 fell 1% to 27,763.13 points for its fifth consecutive decline. The technology-heavy index is now more than 10% below its record high, meeting the usual definition of a correction, as investors question whether substantial artificial intelligence investment will generate sufficient returns and assess growing Chinese competition. Sandisk fell more than 14%, while Marvell Technology and Micron also recorded steep losses. In macroeconomic data, US consumer confidence fell by 1.4 points to 90.8 in July from an upwardly revised 92.2 in June, according to data released on Tuesday.

Swiss stocks reach another record high

Switzerland’s SMI rose 1% to a record 14,571.33 points on Tuesday, extending its advance above 14,500 points. The Euro Stoxx 50 edged up 0.1% to 6,289.51 points, while investors remained cautious before the Federal Reserve’s policy decision and results from major US technology companies. Sika shares jumped more than 9% after the Swiss construction-supplies group reported stronger-than-expected results, while Unilever climbed 8% on robust second-quarter sales. Technology shares remained divided, with software stocks recovering but semiconductor and other artificial intelligence beneficiaries, including ASML, Infineon and Siemens Energy, continuing to decline.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from ADP, Boston Scientific, Lam Research, Meta Platforms, Microsoft, Procter & Gamble, Qualcomm, and Starbucks.

Economic data in focus: Bank of Canada monetary policy meeting minutes (19:30), Federal Reserve interest rate decision (20:00).

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Editor: Alessandro Fezzi
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