Key facts
- AI-related stocks experienced a significant sell-off in Asian markets, following losses in U.S. peers.
- South Korea's KOSPI fell 4% and Japan's Nikkei dropped 1.6%.
- Concerns over massive AI spending are cited as a reason for the decline.
- Oil prices remained stable, with Brent crude futures at $79.81 and U.S. crude at $75.45.
- Investors are awaiting the U.S. nonfarm payrolls report for further economic insight.
AI-related stocks experienced a significant sell-off across Asian markets on Thursday, with South Korea's KOSPI shedding 4% and Japan's Nikkei dropping 1.6%, following substantial gains the previous day. This downturn mirrored losses in U.S. peers, including SpaceX and Advanced Micro Devices, driven by recurring concerns about massive AI spending.
In parallel, oil prices traded in a narrow range, with Brent crude futures rising 0.45% to $79.81 a barrel and U.S. crude edging 0.31% higher to $75.45 a barrel. Investors are closely watching developments regarding a proposed deal between Iran and Oman that could grant Tehran control over traffic through the Strait of Hormuz, a critical energy supply route. While U.S. President Donald Trump suggested a deal was imminent, U.S. officials have maintained they would not permit Iran to control access to the strait.
Traders are also focused on the Federal Reserve's potential rate path ahead of Friday's nonfarm payrolls report. Wednesday's ADP private employment data indicated a slowdown in U.S. private-sector job growth, missing market expectations. An Institute for Supply Management survey, however, pointed to robust growth in the services sector, alongside rising input costs that could sustain inflationary pressures.