Asian Stocks Mixed on AI Investment Jitters; Big Tech Earnings, Fed Decision in Focus
Summary
- Asian stocks were mixed as investor sentiment toward AI-related stocks weakened.
- This week's tech earnings in the US and Asia, and whether AI infrastructure investment is leading to better revenue and profitability, are emerging as the key variables.
- A pause in benchmark rates by the Fed, ECB, and BOJ, along with geopolitical tensions in the Middle East, was cited as a factor set to drive market direction.
Forecast Trend Report by Period
Asian stocks were mixed as investor appetite for artificial intelligence-related shares remained subdued.
Bloomberg reported on Oct. 25 that the MSCI Asia Pacific Index swung between gains and losses in early trading. The gauge fell for a fourth straight week through last week, its longest losing streak since April.
US stock futures were also directionless. S&P 500 and Nasdaq 100 futures erased early gains to trade little changed. After a broad selloff in AI-linked shares last week, a major US semiconductor index notched its longest weekly losing streak since November last year.
Investors are focused this week on results from major US technology companies. Microsoft, Alphabet and Amazon are scheduled to report, with markets watching whether heavier spending on AI infrastructure is translating into stronger revenue and profitability.
Asia also faces a heavy earnings calendar. Bloomberg data show 550 of the roughly 1,200 companies in the MSCI Asia Pacific Index are due to report this week. The list includes South Korean chipmakers Samsung Electronics and SK Hynix, sharpening attention on demand for AI semiconductors and the investment outlook.
Monetary policy decisions from major central banks are also set to guide trading. The Federal Reserve, the European Central Bank and the Bank of Japan are all expected to keep benchmark rates unchanged this week. The Fed raised rates in September for the first time in about three years, but markets are looking to December for the next increase.
Geopolitical tensions in the Middle East remain an overhang. President Donald Trump said a decision point is approaching on whether to pursue negotiations with Iran or resume military operations. Even so, international oil prices edged lower, with Brent crude down 1.1% at about $115.40 a barrel.
"Global financial markets are preparing for another important week," said Nick Twidale, chief market analyst at AT Global Markets. In recent weeks, geopolitical issues have dominated trading, but the focus is now shifting to central banks and interest rates, he added.
Suehyeon Lee
shlee@bloomingbit.ioI'm reporter Suehyeon Lee, your Web3 Moderator.