The Japan Times - US stocks dip ahead of inflation data as tech sell-off hits Asia

While JPMorgan Chase missed analyst estimates, the US banking giant joined three other large US banks in reporting year-over-year profit increases that pointed to continued health in the US consumer.

JPMorgan Chief Financial Officer Jeremy Barnum described US consumer spending as "sort of robust," adding that the consumer credit picture remains "quite resilient" despite persistent inflationary trends.

The strong bank earnings gave some support to Wall Street indices, although investors remained cautious ahead of Wednesday's consumer price index data, a key input to upcoming Federal Reserve decisions.

"Any real acceleration (in inflation) would probably send yields back up, the dollar back up, and that could be a problem for equities," said Peter Cardillo of Spartan Capital Securities.

The S&P 500 finished essentially flat, while both the Dow and Nasdaq ended modestly lower.

Earlier, Asian equity markets were under renewed pressure due to weakness in AI-related names.

The selling came after Hock Tan, chief executive of the US semiconductor giant Broadcom, likened the AI buying frenzy to gambling.

"A lot of investors have no clue what they are investing in," Tan told a conference in Singapore, saying they "set very extreme expectations only to find out that it's almost like they are in a casino".

The International Monetary Fund weighed in on the debate, warning of an AI correction at the beginning of its annual meeting in Bangkok.

The boom in artificial intelligence -- and the related rush to manufacture semiconductors and build data centers -- has provided a boost to global growth despite geopolitical pressures including the Middle East war.

But "growing evidence suggests that AI capabilities can be delivered at lower investment levels... or that potential economic gains may not be as large as expected", the IMF said in its Global Financial Stability Report.

On the trading floors, South Korea's Kospi index tanked 5.5 percent by the close as chip titans SK hynix and Samsung took a beating.

The decline also followed reports that China's CXMT had made progress on new technology to boost memory chip density, which rival firms have also been racing to achieve.

The company is aiming to release a new server-memory product based on the structure by the end of the year, the reports said.

"The tech sector is taking it on the chin," said Trade Nation analyst David Morrison, noting that the CXMT development suggests that going forward, supplies of a key type of memory chips might not be as tight as many investors had thought.

Japanese stocks also slumped, with chipmaker Kioxia tumbling more than 13 percent on the Nikkei 225, which lost 1.8 percent.

- Key figures at around 2020 GMT -

New York - Dow: DOWN 0.4 percent at 51,670.10 (close)

New York - S&P 500: FLAT at 7,805.45 (close)

New York - Nasdaq Composite: DOWN 0.2 percent at 27,204.38 (close)

London - FTSE 100: DOWN 0.1 percent at 10,650.33 (close)

Paris - CAC 40: DOWN 0.1 percent at 7,827.63 (close)

Frankfurt - DAX: DOWN 0.1 percent at 25,259.90 (close)

Seoul - Kospi: DOWN 5.5 percent at 6,035.35 (close)

Tokyo - Nikkei 225: DOWN 1.8 percent at 67,777.52 (close)

Hong Kong - Hang Seng Index: UP 0.3 percent at 24,345.22 (close)

Shanghai - Composite: UP 0.1 percent at 3,800.86 (close)

Brent North Sea crude: DOWN 0.9 percent at $105.69 per barrel

West Texas Intermediate: UP 0.4 percent at $94.14 per barrel

Euro/dollar: UP at $1.1200 from $1.1155 on Monday

Pound/dollar: UP at $1.3256 from $1.3208

Dollar/yen: DOWN at 158.32 yen from 158.61 yen

Euro/pound: UP at 84.49 pence from 84.45 pence

burs-jmb/md

H.Nakamura--JT