Asia stocks fall as Amazon, Intel results deepen tech rout

Asian stocks fell early on Friday, October 30, after a run of disappointing technology earnings sped up a rotation out of the artificial intelligence trade and sent investors into haven assets. Treasuries rallied across the curve, according to Bloomberg. South Korea's Kospi, which investors treat as a barometer of the AI trade, dropped as Samsung Electronics and SK Hynix ↘ 7.95% declined. The slide pulled the MSCI Asia Pacific Index lower, and Japan's Topix and the Shanghai Composite also fell. Australia's S&P/ASX 200 and Hong Kong's Hang Seng edged higher.swissinfo.ch

Megacap results disappoint

The selling came after more weak results from large tech companies. Amazon Amazon.com, Inc. ↘ 1.41% slumped in after-hours trading on Thursday after reporting higher spending and slower growth in its online business, and Intel ↘ 28.58% plunged after its revenue missed estimates. Futures on the Nasdaq 100 then extended their losses. Earlier on Thursday, Alphabet ↘ 1.45% posted a record drop after missing quarterly earnings and revenue expectations and reporting more than $9 billion of negative free cash flow. Fortinet ↘ 2.17% and ServiceNow ↘ 4.15% each fell more than 20% after their own results.virginiabusiness.com+2

On Thursday the Nasdaq Composite lost 1.36% and the S&P 500 ↘ 1.77% slipped 0.31%, while the small-cap Russell 2000 gained. More than 400 S&P 500 members rose as money moved into more defensive stocks. "There's plenty of other places to go with your money outside of the AI trade," said Ross Mayfield of Baird. Microsoft ↘ 1.55%, which beat expectations, still drew very strong demand for a $25 billion bond sale.swissinfo.ch+2

Havens draw buyers

Traders bought the Swiss franc, the yen and US government debt, with shorter-dated Treasuries leading as rate-hike bets eased slightly. Bitcoin ↘ 0.06% fell after the crypto exchange Binance halted deposits and withdrawals over a suspected hack. The bond rally came even though data released Thursday showed US growth in the third quarter was the fastest in a year and that the Fed's preferred inflation gauge rose 0.5% in September. White House adviser Kevin Hassett said the Fed would "probably appropriately act" if October inflation comes in high. The Bank of Japan is expected to hold rates on Friday.theedgemalaysia.com+1

"The concern isn't that AI demand has already slowed," said Anna Wu of Floodlines Research. "It's that higher funding costs and credit risk could eventually force hyperscalers to slow their build-out".swissinfo.ch