Key facts
- Japan's Nikkei fell 0.5% and South Korea lost 0.8%, having shed 16% last month, the report said.
- Goldman Sachs analysts expected hyperscaler capex to almost double to $800 billion this year and reach $1.2 trillion in 2027.
- Futures implied a 72% chance of a quarter-point Fed rate rise in December, with 55 basis points of tightening priced in.
- Brent futures dipped 1.5% to $111.72 a barrel after a 13.6% jump in October, the report said.
- The Nasdaq lost almost 7% in October, its worst month since the tariff rout of April 2025.
Asian share markets slipped on Monday, November 2, as worries about the sustainability of the AI investment boom weighed on the tech sector, Reuters reported. Japan's Nikkei fell 0.5%, South Korea lost 0.8% after shedding 16% last month, and MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.4%. EUROSTOXX 50 futures firmed 0.1% and DAX futures were flat.
Concerns about negative cash flow and the scale of AI capital spending saw the cost of insuring against corporate defaults blow out the previous week, while gold hit a one-year low amid talk that stressed investors were selling to raise money for margin calls. The report also cited the US midterm elections, where a win by Democrats in either or both houses could create more political hurdles for data centres.
Withdrawals from Binance added to the unease, the report said, as the cryptocurrency exchange went back online on Sunday after hackers stole billions from the platform the previous week. Earnings from Apple, AMD and Palantir were due that week, following a near 29% tumble in Intel shares on Friday.
Analysts at Goldman Sachs expected capex by hyperscalers to almost double to $800 billion this year and rise further to $1.2 trillion in 2027, the report said. They saw S&P 500 EPS growth of nearly 30% in 2026, slowing to 18% next year. "Earnings results have underscored the fundamental challenge facing equity investors - earnings growth is strong, but it is no longer accelerating," Ben Snider, Goldman's chief US equity strategist, wrote in a note.
On Wall Street, S&P 500 futures edged up 0.4% and Nasdaq futures bounced 0.6%, the report said. The Nasdaq lost almost 7% in October, its worst month since the tariff rout of April 2025. Futures implied a 72% chance of a quarter-point Fed rate rise in December, with 55 basis points of total tightening priced in against more than 70 basis points a month earlier. Yields on 10-year Treasuries nudged up to 4.952%, well off an October peak of 5.3645%, while 2-year yields stood at 4.612%.
Markets wagered on hikes from the Reserve Bank of Australia, Bank of England and Riksbank that week, while the Norges Bank was seen on hold, the report said. US ISM manufacturing data for October was due later on Monday and payrolls on Friday, with median forecasts for a 65,000 rise in jobs after September's 29,000 gain and unemployment holding at 4.2%. The euro was flat at $1.1156 and the dollar barely changed at 157.62 yen.