The Japan Times - Stocks retreat as tech mood sours, oil prices jump

AI-linked companies continued the rollercoaster ride they have endured since hitting record highs in June amid worries over colossal investment sums and their timeline for profitability, with growing debt-servicing costs adding to the uncertainty.

A blockbuster quarterly report from Elon Musk's SpaceX -- its first since listing in June -- provided what some hoped would be solid support leading into a crucial earnings season, helping push all three main Wall Street indexes higher Wednesday.

But mixed after-hours releases from Meta and Tesla muddied the waters again for investors.

"Risk-off sentiment is returning amid high geopolitical tensions and a swirl of worries about financing the AI juggernaut," noted Susannah Streeter, chief investment strategist at Wealth Club.

Electric vehicle-maker Tesla announced lower profits in July-September and cut its capital spending forecast for this year, while Facebook-parent Meta lifted its estimates for how much it would spend on artificial intelligence.

The reports come as traders speculate about the outlook for the AI boom, with analysts pointing out that markets fret when firms ramp up spending but also grow concerned when they pull back.

"Meta's numbers reinforce the AI investment cycle, but funding is becoming an increasingly important part of the conversation," said Chris Weston, head of research at Pepperstone.

"Investors will reward growth and monetisation, yet they're also becoming more sensitive to how the next leg of investment is financed and what it means for existing shareholders," he added.

Recent disappointing results from Netflix and a weaker-than-expected earnings forecast from US semiconductor equipment manufacturer Lam Research have added to the unease among investors.

Microsoft, Amazon and Alphabet are due to report next week, with Apple and Nvidia up in November.

Asian tech firms sank Wednesday, dragging broader markets with them, with South Korean chipmakers SK hynix and Samsung down 5.5 percent and four percent respectively.

Japan's Kioxia and Tokyo Electron were off as much as seven percent.

The Kospi index in Seoul fell more than three percent and Tokyo's Nikkei 225 was off 2.7 percent.

Hong Kong slid more than three percent, with NetEase and Tencent taking a battering, while Chinese e-commerce giants Alibaba and JD.com were also weighed by government calls for tighter quality standards.

European stock markets, which feature far fewer major tech firms, were lower in midday deals.

The Paris CAC 40 shed 1.4 percent amid concerns over high government debt in France and the recent violent street protests across the country.

Heading losses on the Paris stock market was Hermes -- its share price down 7.5 percent after the luxury fashion brand reported quarterly sales that undershot market expectations.

Barclays traded flat after revealing alongside a rise in profit that it would cut about 5,000 jobs by the end of the year as AI increasingly replaces support roles.

- Key figures at around 1030 GMT -

London - FTSE 100: DOWN 0.4 percent at 10,708.45 points

Paris - CAC 40: DOWN 1.3 percent at 7,816.59

Frankfurt - DAX: DOWN 0.9 percent at 25,415.58

Tokyo - Nikkei 225: DOWN 2.7 percent at 63,907.84 (close)

Hong Kong - Hang Seng Index: DOWN 3.0 percent at 22,934.68 (close)

Shanghai - Composite: DOWN 1.5 percent at 3,658.03 (close)

Brent North Sea crude: UP 2.7 percent at $111.75 per barrel

West Texas Intermediate: UP 2.2 percent at $99.28 per barrel

Euro/dollar: DOWN at $1.1225 from $1.1233 on Wednesday

Pound/dollar: DOWN at $1.3387 from $1.3395

Dollar/yen: DOWN at 156.96 yen from 158.19 yen

Euro/pound: DOWN at 83.85 pence from 83.86 pence

burs-bcp/ajb/gv

M.Matsumoto--JT