Asian Stocks Slide As AI Spending Fears Spook Markets

Asian equities fell on Friday as renewed concerns over massive investments in artificial intelligence rattled markets, while gold and silver pulled back sharply after hitting multiple record highs and oil prices eased on hopes of reduced US-Iran tensions.

Global markets have been on a rollercoaster this week, buffeted by a weaker dollar, renewed tariff threats, Donald Trump’s warnings toward Tehran, and mounting anxiety over a potential US government shutdown.

Earlier optimism around the tech sector, fuelled by strong earnings from firms such as Meta, Samsung and SK hynix, had helped support sentiment. However, that confidence faltered on Thursday after Microsoft announced a sharp increase in spending on AI infrastructure, reviving fears that returns on such heavy investments may take longer to materialise.

Investors were increasingly worried that company valuations may be overstretched, with markets potentially in bubble territory after years of tech-driven rallies to record highs.

“Microsoft suffered its worst session since the COVID-era crash, falling 12 per cent and accounting for over two-thirds of the S&P 500’s decline,” said National Australia Bank strategist Rodrigo Catril. He noted that concerns focused on surging investment costs, slower growth in Azure cloud services, and a longer timeline to monetise AI.

Wall Street closed mostly lower, with only the Dow Jones Industrial Average posting gains.

Asian markets followed suit amid speculation that Trump could nominate Kevin Warsh, a former Federal Reserve governor seen as hawkish on interest rates, as the next Fed chair. The president is expected to announce a successor to Jerome Powell on Friday morning US time.