Asian stock markets fell on Thursday as concerns over escalating spending on artificial intelligence unsettled investors, with technology companies facing particular pressure. MSCI’s broadest Asia-Pacific index outside Japan slid 1%, while South Korea’s KOSPI fell 1.7%, Taiwanese shares lost 0.7%, and Hong Kong’s Hang Seng dipped 0.8%. Japan’s Nikkei remained largely flat as markets digested rising capital expenditure plans from major tech players.
The tech selloff intensified after Google parent Alphabet reported fourth-quarter results that exceeded expectations but announced an aggressive capital expenditure target of $175 billion to $185 billion for 2026, far above analyst forecasts. Shares of Alphabet swung dramatically, dropping over 6% in after-hours trading before settling just 0.4% lower. Disappointing earnings from Advanced Micro Devices, whose stock tumbled 17%, further fueled fears about the impact of AI investment on technology valuations. Tony Sycamore, analyst at IG, noted that investors are “hyper-sensitive and hyper-nervous” about the scale of AI spending, contributing to heightened volatility.
Not all tech news was negative. Chip giant Nvidia rallied nearly 2% after-hours following the increased demand for equipment spending, helping lift Nasdaq futures by 0.6% and the S&P 500 by 0.4%, partially offsetting earlier losses. Market participants are also watching upcoming earnings from Amazon, as well as policy meetings from the Bank of England and European Central Bank, where interest rates are expected to remain unchanged.
Currency and commodity markets reflected global economic uncertainty. The Japanese yen weakened for a fourth consecutive day ahead of a general election expected to cement Prime Minister Sanae Takaichi’s spending plans. The dollar traded at 156.93 yen after rallying from recent lows. In oil markets, prices fell roughly 1.4% following two days of gains, as the U.S. and Iran agreed to hold nuclear talks in Oman despite unresolved disagreements over the agenda. Gold and silver edged higher, rebounding slightly from last week’s dramatic declines, with gold rising 0.3% to $4,976 an ounce and silver up 0.2% to $88.20 an ounce.
The global market response illustrates growing investor caution over the intersection of high-tech investment, AI adoption, and macroeconomic pressures, even as certain sectors show resilience amid volatility.
