Major technology firms faced a sharp sell-off as disappointing quarterly financial reports from industry giants Amazon and Intel stoked investor fears regarding the sustainability of the artificial intelligence boom. Amazon shares fell more than 7% in after-hours trading after its quarterly results failed to meet analyst expectations for both profit and revenue. Meanwhile, Intel shares plummeted 23% following a weak earnings forecast, which the company attributed to supply chain issues and sluggish demand for PC processors.
These developments followed a report from Google parent company Alphabet, which revealed slower revenue growth across its search and advertising divisions while signaling plans to increase capital expenditure. Alphabet shares dropped more than 12% in the wake of the announcement, contributing to a broader decline that saw the Nasdaq index finish the day down more than 1%.
The negative sentiment spread to Asian markets, where South Korean chipmaker SK hynix saw its shares fall more than 7%, and rival Samsung lost 3%. Japanese semiconductor firm Kioxia experienced a decline of more than 7%, while both Advantest and SoftBank skidded nearly 6%. The broader regional market felt the impact as well, with Seoul dropping more than 3% and markets in Tokyo and Taipei shedding more than 2%. Further losses were reported in Shanghai, Singapore, Bangkok, Jakarta, and Manila, though Hong Kong, Sydney, Mumbai, and Wellington managed to see gains.
Anna Wu of Floodlines Research noted that the current earnings season has been particularly difficult for AI-focused companies, with most facing punishment amidst broader concerns regarding inflation and the potential for an AI bubble. She suggested that the concern isn't that AI demand has already slowed. It's that higher funding costs and credit risk could eventually force hyperscalers to slow their build-out.
Investor anxiety persists regarding the substantial capital being directed toward AI projects, particularly as rising borrowing costs fuel concerns over corporate financial health. While earlier in the week optimism was high—driven by SK hynix reporting a 632% surge in operating profit and AI giant Anthropic filing for an IPO with a 1,300% revenue increase—the latest results have failed to provide long-term reassurance.
Market attention is now shifting toward the upcoming US midterm elections and their potential impact on the final two years of Donald Trump’s presidency. Analysts like Michael Hewson of MCH Market Insights expressed skepticism about the market impact of the elections themselves, noting that a potential spike in crude oil prices above $120 a barrel remains a significantly larger risk. Markets are also reacting to reports of heightened US-Iran tensions, with Brent crude moving toward $120 a barrel for the first time since April.
In the cryptocurrency sector, Bitcoin fell approximately 5% to a one-month low of around $76,400 following a major security breach at the Binance exchange. The platform initially provided conflicting statements on X, but it said later on its X account for Latin America that the total estimated impact is around $6.3 billion. That would be four times the amount impacted in the biggest-ever cyberattack of its kind to date, which saw $1.5 billion (€1.34bn) taken in February 2025 from the Bybit platform. Binance stated it is working with blockchain partners to freeze affected assets and has pledged to cover all user losses. Meanwhile, in currency markets, the Japanese yen strengthened against the dollar after the Bank of Japan maintained steady interest rates and noted that inflation had exceeded its 2% target.
Paris stocks were flat as data showed that the French economy had contracted in the third quarter, compounding concerns about public finances and growing political tensions.
"Does the outcome matter for the markets, probably not, although a crude oil price which moves above $120 a barrel could well be another story. This remains a much bigger risk for markets than anything the US midterms might bring about."
