Global Markets Experience Tech Selloff as AI Investment Concerns Mount Following Disappointing Earnings

Technology stocks extended their decline through Friday’s session as disappointing earnings reports from major US companies intensified worries about the rapid AI investment cycle. Amazon joined the ranks of tech giants facing market pressure after missing earnings expectations while signaling plans for more aggressive AI spending. Meanwhile, Intel plummeted nearly 30% after its outlook failed to meet market expectations.

The downturn in technology shares delivered a decisive finish to an already challenging week for the Nasdaq, which closed down almost 3% on the day. The Dow Jones and S&P 500 also ended substantially lower, with the session further weighed down by rising oil prices and a decline in bitcoin value following Binance’s acknowledgment of what could be the largest hack of its kind globally.

“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,” explained Kathleen Brooks, research director at XTB trading group. Peter Cardillo of Spartan Capital Securities noted that several major tech names connected to artificial intelligence have been dragging market performance downward, questioning whether the substantial capital being deployed will generate adequate returns.

Microsoft, Alphabet, Amazon, and Meta all delivered quarterly results this week, each indicating continued heavy investment in data centers and semiconductor infrastructure despite growing investor impatience for returns on these expenditures. Collectively, these four companies are projected to invest over $700 billion in capital expenditures this year—approximately matching the entire economic output of Argentina or Belgium—with a significant portion directed toward AI infrastructure development according to analyst estimates.

Additional AI-related stocks faced pressure during Friday’s session, with Nvidia falling 4.2%, Micron dropping 5.3%, and data center firm CoreWeave losing nearly 10%. These losses reversed earlier market optimism sparked by AI pioneer Anthropic’s initial public offering filing earlier in the week.

“Given the significance of technology stocks to global markets, it’s unsurprising to witness worldwide market losses at week’s end,” stated market analyst Chris Beauchamp at online trading platform IG. South Korea’s tech-weighted Kospi index closed down 3.5% while Tokyo’s market finished with a 2.0% decline. Hong Kong diverged from this trend, closing up 1.5%.

Attention now turns to Tuesday’s US midterm elections and their potential implications for the final two years of Donald Trump’s presidency. Oil prices rose approximately 2% on Friday following Iran’s announcement that four tankers had struck mines in the Strait of Hormuz. ExxonMobil shares gained 2.2% after reporting third-quarter profits more than doubled to $15.4 billion, driven by higher oil prices and strong refining margins amid the US-Iran conflict.

Key figures at approximately 2020 GMT:
– New York – Dow: DOWN 1.1% at 51,770.31 (close)
– New York – S&P: DOWN 1.8% at 7,580.07 (close)
– New York – Nasdaq Composite: DOWN 2.9% at 25,437.00 (close)
– London – FTSE 100: UP 0.1% at 10,729.78 (close)
– Paris – CAC 40: FLAT at 7,969.42 (close)
– Frankfurt – DAX: DOWN 0.9% at 25,818.21 (close)
– Tokyo – Nikkei 225: DOWN 2.1% at 63,290.11 (close)
– Seoul – Kospi: DOWN 3.5% at 5,730.74 (close)
– Hong Kong – Hang Seng Index: UP 1.5% at 23,294.42 (close)
– Shanghai – Composite: DOWN 1.4% at 3,599.02 (close)
– Brent North Sea crude: UP 2.4% at $117.64 per barrel
– West Texas Intermediate: UP 2.1% at $104.12 per barrel
– Euro/dollar: DOWN at $1.1168 from $1.1180 on Thursday
– Pound/dollar: UP at $1.3396 from $1.3376
– Dollar/yen: DOWN at 157.54 yen from 157.71 yen
– Euro/pound: DOWN at 83.37 pence from 83.57 pence

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