Wall Street’s main indexes fell as technology shares led losses after a report said OpenAI’s annualised revenue was US$20 billion (S$25.6 billion) below what the company had previously signalled. Meanwhile, SpaceX, Broadcom and Oracle were expected to raise billions to buy high-end AI chips, adding to investor concern about the cost of financing the industry’s expansion.
Who Pays for the Funding Push
Asian stocks slipped on Oct. 9 and looked set for a second straight weekly decline. Investors were weighing the sums required for artificial intelligence investment against elevated energy prices and turmoil in bond markets. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.16% and was on track for a weekly decline of more than 1%.
Japan’s Nikkei fell more than 1%. South Korea and Taiwan markets were closed for a holiday.
Chris Weston, head of research at Pepperstone, wrote: “It has been a sea of red across technology, AI infrastructure and semiconductors, with the OpenAI headlines seemingly providing the catalyst for investors to take some exposure off the table.” He added that price movements showed investors becoming “more selective about where they want exposure and, importantly, what price they are prepared to pay for future growth.”
SpaceX, Broadcom and Oracle are expected to raise large sums for AI infrastructure. They plan to use the funds to buy high-end AI chips.
Australia’s Firmus, a data-centre operator backed by Nvidia, shelved its US$5 billion initial public offering, citing market volatility and conditions. The company said it would pursue a private fundraising round instead.
Borrowing Costs Rise
Higher energy costs, expectations of central-bank rate hikes and concerns about rising government debt had fuelled a global bond sell-off that lasted for months. The sell-off pushed borrowing costs to multi-decade highs, making it more expensive for governments and companies to finance themselves.
Charu Chanana, chief investment strategist at Saxo, said: “With long-term yields back around multi-decade highs, investors no longer have the luxury of valuing AI growth in a low-cost-of-capital world.” She said higher sovereign yields and increased corporate issuance to fund AI infrastructure meant capital was “both more expensive and more selective,” putting balance sheets and the quality of future earnings under scrutiny.
The U.S. benchmark 10-year Treasury yield held at 5.226%, near the 24-year high it reached on Oct. 7. Solid auctions that week helped calm U.S. Treasury markets.
ING analysts said the pause in the Treasury market sell-off “does not mean the bond market sell-off is over, but it does at least put it on pause, at least just for now.”
War, Oil and Government Debt
Brent crude futures traded at US$103.70 a barrel during Asian hours, after rising more than 4% in the previous session. The war in the Middle East had fuelled inflation worries and pushed interest rates higher around the world.
President Donald Trump said on Oct. 8 that the United States wouldn’t launch an attack on Iran before the November U.S. midterm elections. Traders remained sceptical that the war was nearing an end.
Nick Twidale, chief market strategist at ATFX Global, said markets were watching whether Trump would stick to his word if Iranian attacks intensified. He said any indication the White House was reconsidering military action could send oil prices sharply higher, particularly with tanker traffic through the Strait of Hormuz already under significant pressure.
Investors also watched France’s debt load, budget deficit and political outlook ahead of the 2027 presidential election. ING analysts said French bond spreads faced more than half a year of higher volatility and continued elevation before the two rounds of the election in April and May next year.
The dollar stayed strong as the euro headed for a fifth straight week of losses. The euro last traded at US$1.122, around the 17-month low it touched earlier in the week amid concerns about French debt.