Stocks Pare Tech-Led Losses, Crude Oil Declines: Markets Wrap
(Bloomberg) — Technology stocks trimmed their losses as the European session neared, after disappointing earnings from two industry heavyweights earlier revived doubts over whether billions of dollars in AI spending will deliver sufficient returns. Oil fell.
Futures for the Nasdaq 100 Index were 0.8% lower on the day, after earlier sliding as much as 1.7%. Contracts for the S&P 500 pared declines to just 0.1% as Asian shares came off their session lows. South Korea’s Kospi Index, which led losses in the region after weak tech earnings, recovered from a drop of as much as 3.2% to trade just 0.7% down.
Technology stocks earlier came under pressure as Alphabet Inc. slumped 10% in extended trading after sales underwhelmed, reinforcing concerns that Google is losing ground to AI rivals despite pouring hundreds of billions of dollars into the technology. Samsung Electronics Co. slid as much as 6.6% in Seoul as the lack of a new shareholder return plan disappointed investors.
The latest earnings have exposed fresh cracks in the AI trade, raising doubts about whether massive spending on the technology can deliver returns quickly enough to justify higher valuations. Amazon.com Inc.’s results Thursday, followed by Apple Inc. next week, will test sentiment further, with investors increasingly demanding evidence that heavy investment is translating into stronger profits.
“Expectations were already extremely high, so in a sense, simply meeting expectations isn’t good enough,” said Wataru Akiyama, a strategist at Nomura Securities. “Unless companies can demonstrate earnings growth that exceeds those already-high expectations, their shares can fall when they report results.”
The news wasn’t all bad as Microsoft Corp. shares rose 2.9% in after-hours trading on solid cloud sales, while Oracle Corp. earlier surged 11% after issuing a long-term outlook for free cash flow. A gauge of Oracle’s credit risk improved the most in nearly nine months.
Samsung also hiked its spending plans after relentless demand for AI infrastructure drove memory prices higher, though its chip division’s profit missed lofty investor expectations. The capex boost came as soaring prices and demand from AI developers buoy memory makers.
The company said it will announce the plan at the end of January, in contrast with peer SK Hynix, which delivered a blockbuster earnings report Wednesday along with its intention to return about $45 billion more to shareholders.
“Deferring the shareholder return details to January is disappointing,” said Rob Li, managing partner at New York-based Amont Partners. “This gives excuses to stock traders to rotate money to SK Hynix.”
SK Hynix shares rose 4.6%. Chinese tech hardware shares tumbled as impressive quarterly results at some companies failed to offset persistent concerns over fundamentals and weak global AI sentiment.
What Bloomberg’s Strategists Say…
“Treasuries are rallying as equities slide, with lower yields nudging the dollar down. That flight-to-quality pattern is becoming more established and may serve as a key barometer for investors heading into next week’s midterms in the US. Weakness in gold and Bitcoin offers another sign that Treasuries are reclaiming their role as the market’s preferred haven.
— Mark Cranfield, MLive Strategist. Click here for the full analysis.
Meanwhile, shorter-maturity Treasuries gained for a second day after the Federal Reserve held off from raising interest rates on Wednesday. The yield on the rate-sensitive two-year note dropped two basis points to 4.68%. The yield on the 10-year also fell two basis points to 5%.
“It’s really the market catching the hint that Fed Chair Warsh is showing some hints of caution, and it may be related to perceived excessive AI optimism,” said Eugene Leow, a strategist at DBS Bank Ltd. in Singapore. “Safety and the potential of slowing activity in the AI segment is weighing on yields.”
Oil dropped as traders assessed fresh diplomatic efforts in the Middle East to avert a potential restart of US military strikes on Iran. Global benchmark Brent declined 1.2% to $113.90 a barrel.
Gold slipped 0.7% to about $4,040 an ounce, while Bitcoin fell 1.5% to trade around $80,000.
Thursday also brings core personal consumption expenditures data, the Fed’s preferred inflation gauge, which will offer fresh clues on price pressures in the economy.
After the Fed voted 10-2 to hold rates steady, attention turns to the European Central Bank’s monetary policy decision Thursday and the Bank of Japan’s on Friday. Both are expected to keep rates unchanged.
“No change in policy is expected by the ECB, though it may look to calm fears about Eurozone sovereign debt risks by stressing it has the tools to ward off systemic threats to the economy,” Peter Dragicevich, currency strategist for APAC at CorPay, wrote in a note.
Corporate News:
Deutsche Telekom AG’s plans to combine with its American arm T-Mobile US Inc. have hit a snag, people familiar with the matter said, casting doubt on what would be the largest-ever public merger. Marvell Technology Inc. is in advanced talks to buy data center optics maker Lumentum Holdings Inc., according to people familiar with the matter. Hyundai Motor Co. reported better-than-expected earnings for the third quarter as the automaker benefited from strong demand for its cars in North America and India. Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.2% as of 2:36 p.m. Tokyo time Nikkei 225 futures (OSE) rose 0.4% Japan’s Topix was little changed Hong Kong’s Hang Seng was little changed The Shanghai Composite fell 0.5% Euro Stoxx 50 futures rose 0.3% Currencies
The Bloomberg Dollar Spot Index was little changed The euro fell 0.1% to $1.1142 The Japanese yen was unchanged at 157.84 per dollar The offshore yuan was little changed at 6.6583 per dollar Cryptocurrencies
Bitcoin fell 1.3% to $80,228.87 Ether fell 1.4% to $2,325.23 Bonds
The yield on 10-year Treasuries declined two basis points to 5.00% Japan’s 10-year yield advanced one basis point to 2.835% Australia’s 10-year yield declined four basis points to 5.17% Commodities
West Texas Intermediate crude fell 1.6% to $101.10 a barrel Spot gold fell 0.7% to $4,039.27 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Aya Wagatsuma, Ruth Carson, Youkyung Lee and Matthew Burgess.
©2026 Bloomberg L.P.
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