Jornal Do Brasilia - Global markets retreat as tech mood sours, oil prices jump

AI-linked companies continued their rollercoaster ride 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.

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

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.

Rising oil prices also dragged on markets, with Brent futures gaining four percent to $113.17 per barrel as Iran's Revolutionary Guards threatened to strike American bases across the Middle East if the US military continues to escort ships through the Strait of Hormuz.

Most of the biggest AI players still haven't reported results yet, but markets were not thrilled with reports released late Wednesday.

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.

Shares in Tesla shed 3.1 percent in New York, while those in Meta slumped 7.0 percent.

Wall Street's main indices moved lower, with the tech-heavy Nasdaq Composite dropping 2.6 percent.

Briefing.com analyst Patrick O'Hare cited Meta's spending plans as a catalyst, along with a cautious outlook from Lam Research citing supply chain constraints as a problem.

Such dynamics suggest "companies won't be able to grow as much as has been afforded in their stock trade," said O'Hare, who pointed to strong demand for US Treasuries as evidence investors are seeking low-risk investments.

"Investors are seeking some safety under the theory that perhaps this AI trade could get unruly," he said.

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

- Asian chipmakers down -

Asian tech stocks sank Thursday, 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, ended the day lower.

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 4.9 percent after the luxury fashion brand reported quarterly sales that undershot market expectations.

- Key figures at around 2015 GMT -

New York - Dow: FLAT at 52,867.98 (close)

New York - S&P 500: DOWN 1.2 percent at 7,663.43 (close)

New York - Nasdaq Composite: DOWN 2.6 percent at 26,008.86 (close)

London - FTSE 100: DOWN 0.3 percent at 10,725.03 (close)

Paris - CAC 40: DOWN 1.4 percent at 7,811.26 (close)

Frankfurt - DAX: DOWN 1.1 percent at 25,371.75 (close)

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 4.0 percent at $113.17 per barrel

West Texas Intermediate: UP 2.4 percent at $99.47 per barrel

Euro/dollar: DOWN at $1.1217 from $1.1232 on Wednesday

Pound/dollar: UP at $1.3399 from $1.3394

Dollar/yen: DOWN at 156.86 yen from 158.14 yen

Euro/pound: DOWN at 83.781 pence from 83.86 pence

burs-jmb

F. Fernandes--JDB