(Nov 3) : Asian technology stocks looked set for losses Tuesday after a selloff in US chipmakers deepened, overshadowing a plunge in oil prices on hopes for diplomatic progress toward ending the war in Iran.
Equity-index futures for Japan and South Korea, both heavily exposed to technology, pointed lower, while contracts for Australia advanced. In the US, a gauge of chipmakers extended a three-day rout to 12% and the Nasdaq 100 sank 10% from its peak, entering a technical correction. The S&P 500 Index fell by 0.5%.
In Asia, attention will also turn to Chinese equities after the People’s Bank of China said it will encourage financial institutions to make greater use of stock-support tools and optimize their terms as authorities seek to bolster market stability.
In late hours, Apple Inc. posted decelerating sales growth, with China revenue missing estimates. Elsewhere, Anthropic PBC disclosed a twelve-fold increase in quarterly revenue while outlining plans to spend more than US$895 billion in the coming years.
Brent crude slumped over 8% to just over US$104 a barrel as traders assessed signs of progress toward ending the conflict, a day before Americans vote in the midterm elections. A Bloomberg gauge of the dollar weakened and long-dated Treasuries outperformed.
Easing geopolitical tensions are lowering energy prices and inflation risks, yet the drop in crude has so far failed to revive appetite for technology shares as concerns over AI spending and stretched valuations persist.
“Lower oil should be a tailwind for tech, but the fact that stocks could not hold the open even with crude plunging shows how little conviction is left even after last week’s carnage,” said Dave Mazza, chief executive officer at Roundhill Financial.
Iranian President Masoud Pezeshkian said his government had been granted more authority by the country’s supreme leader to pursue peace talks, while President Donald Trump hinted at progress in negotiations.
“They want to make a deal, and that could happen,” Trump told reporters in Washington. He added that oil prices had fallen because “it looks like that’s coming together very nicely” and “people found out about it.”
Moments later, Trump mouthed “No” when a reporter shouted a question about whether he would resume military strikes on Iran after Tuesday’s midterm elections.
Concerns over AI spending were also in focus as big technology companies returned to US bond markets to fund their investment plans. After an almost three-month borrowing drought, they’re flooding back in.
Oracle Corp. is selling US$10 billion of bonds alongside an equal amount of equity, while Meta Platforms Inc. is eyeing at least US$20 billion from a potential sale in multiple currencies. Microsoft Corp. sold US$25 billion of bonds Thursday, its first US offering since 2017, while Alphabet Inc. tapped Europe’s bond market Monday for the second time this year.
The economic calendar adds another potential catalyst for the markets. US manufacturing activity picked up in October, supported by the strongest increase in production in nearly five years, while investors are looking ahead to a series of labor-market reports.
US job openings data due Tuesday are expected to show listings edged higher in September, while weekly jobless claims Thursday are seen remaining near historically low levels. Economists expect Friday’s payrolls report to show job growth more than doubled to 65,000 in October, with the unemployment rate holding at 4.2%.
“It’s going to be an extremely interesting week in the markets,” said Matt Maley at Miller Tabak. “We’ll have political issues to decipher as well as geopolitical ones. And growing doubts about AI investment returns will likely matter much more than historical patterns in determining the market’s direction going forward.”
Uploaded by Isabelle Francis