Alphabet’s results spark doubts over AI spending sustainability while Brent crude tops $100, pressuring chipmakers and equities.
Asian shares tumbled as investors reassessed AI infrastructure spending following Alphabet’s earnings and a spike in oil prices above $100. Chipmakers, key beneficiaries of the AI boom, led declines amid fears of reduced hyperscaler capital expenditure. Samsung Electronics and SK Hynix each fell around 7%, contributing to a 5.5% drop in the KOSPI.
The selloff reversed gains from the prior three sessions, with the Korea Exchange activating sidecar trading curbs on the KOSPI and KOSDAQ. Japan’s Nikkei extended its monthly decline to over 7%, while the won strengthened to an 11-week high despite equity outflows, signaling defensive positioning.
Traders cited the dual pressure of a tech valuation reset and energy-driven inflation fears as a double headwind. Foreign investors sold significant volumes of South Korean shares, amplifying the downturn.