Asian stocks were mixed Monday as investors struggled to recover from last week’s tough run fuelled by disappointing earnings from tech titans, while eyes were also turning to the United States ahead of crucial midterm elections.
Traders did get some support from a drop in oil prices following a report that Donald Trump wanted negotiations with Iran to play out rather than resume his war after the polls.
AI-linked firms were hit by another wave of selling as Wall Street giants including Amazon, Alphabet and Microsoft signalled they would keep pouring money into data centres and chips even as investors grow impatient for returns.
The firms, along with Meta, are on track to spend more than $700 billion on capital investment this year, much of it on AI infrastructure, according to analyst estimates.
The reports added to concerns that the vast sum poured into the sector may have been overdone, while Bloomberg said 90 percent of software companies in the S&P 500 had beaten earnings expectations this season, while just 70 percent topped revenue.
That compared with all companies beating profits in the previous three months, and more than 80 percent topping on sales.
Apple, Advanced Micro Devices and software titan Palantir are due to report this week.
Steep losses in New York saw the Nasdaq end almost three percent down, and Asian tech also struggled at the start of this week.
Japanese chipmaker Kioxia plunged more than 15 percent after giving a cautious outlook that fell short of forecasts.
The firm has plunged around 70 percent from its record high set in June, though it is still up more than 200 percent since the start of the year.
South Korea’s Samsung also fell more than one percent, though rival SK hynix was up more than one percent. Taiwan’s TSMC added nearly two percent.
The mixed performance in tech was reflected in broader markets, with Tokyo, Sydney, Singapore and Taipei all down while Seoul, Hong Kong and Shanghai rose.
Oil prices sank more than two percent on hopes for a negotiated end to the Iran crisis, with Axios reporting that the US president wanted talks to continue, to the disappointment of Israeli Prime Minister Benjamin Netanyahu.
The news outlet also said Vice President JD Vance had sent a letter to Iranian national security chief Mohsen Rezaei about possible new talks, marking the highest-level move in months.
“Despite the stalemate outcome following the Israeli elections, the chances of a diplomatic breakthrough may be improving following intensified mediation efforts by Qatar and regional allies,” said FOREX.com’s Razan Hilal.
