Global markets showed renewed volatility as AI-related enthusiasm collided with concerns about the scale of corporate spending and emerging geopolitical developments. Tech-heavy South Korea's KOSPI slipped 4% during Asian trading on Thursday after rallying nearly 6% the previous session. Japan's Nikkei fell 1.6% following a 3.66% jump, while Taiwan's benchmark was roughly unchanged after climbing nearly 2.9% earlier.
Those Asian moves echoed losses among U.S. peers, where shares of Elon Musk-led AI and satellite company SpaceX and U.S.-listed chipmaker Advanced Micro Devices tumbled amid recurring investor unease about potentially massive AI expenditures. The episode highlighted a pattern of rapid advances followed by sharp pullbacks in securities tied to AI themes.
Geopolitical noise added another layer of market uncertainty. Reuters reported a proposed arrangement between Iran and Oman that could give Tehran control over inbound traffic through the Strait of Hormuz, a critical channel for global energy flows. There was no immediate reaction from U.S. authorities to the report. U.S. President Donald Trump said a deal to reopen the strait was imminent, while U.S. officials have repeatedly stated they would never accept Iran controlling access to the waterway.
Oil prices remained in the roughly $70-a-barrel band as investors awaited further clarity. Brent crude futures rose 0.45% to $79.81 a barrel and U.S. crude increased 0.31% to $75.45 a barrel in the Asian session, reflecting cautious positioning in energy markets in the face of the Strait of Hormuz reports.
Market participants were also monitoring the likely path of Federal Reserve policy ahead of Friday's U.S. nonfarm payrolls report. Economic data released earlier in the week added to the mixed backdrop: Wednesday's ADP private employment report showed U.S. private-sector job growth slowed in July from June and missed expectations, while an Institute for Supply Management survey signalled continued expansion in the services sector alongside rising input costs that could keep inflation elevated.
Key scheduled data that could influence trading on Thursday included Germany's industrial orders for June and U.S. initial jobless claims. Against this data flow, traders weighed how labour market momentum, inflation signals and geopolitical developments might interact with central bank expectations and equity valuations.
Market snapshot
- KOSPI -4.15%
- Nikkei 225 -0.92%
- Advanced Micro Devices -7.04%
- SpaceX -13.61%
- Brent crude +0.45% to $79.81 a barrel; U.S. crude +0.31% to $75.45 a barrel