Asian shares displayed a mixed performance on Thursday as concerns surrounding the artificial intelligence sector were reignited by weaker-than-expected earnings from Oracle. This development comes in the wake of the Federal Reserve’s recent interest rate cut, which had initially buoyed U.S. stock markets.
The U.S. markets approached record highs following the Fed’s decision. While futures indicated a decline, particularly in oil prices, investor sentiment was shaped by comments from Fed Chair Jerome Powell that suggested potential for further interest rate cuts in 2026. However, the sharp decline of Oracle’s shares, which fell by 11.5% in aftermarket trading, weighed heavily on Asian technology stocks.
Market Reactions Across Asia
In Tokyo, the Nikkei 225 index dropped 0.9% to close at 50,148.82, largely influenced by a 7.7% decline in shares of SoftBank Group Corp., a key player in AI investments. Market participants are also bracing for an upcoming meeting of the Bank of Japan, where expectations of a rate hike are growing.
Meanwhile, Hong Kong’s Hang Seng index saw a modest decrease of 0.1%, ending at 25,513.38. This decline followed a decision by the Hong Kong Monetary Authority to lower borrowing costs to 4.00%, the lowest since October 2022. The Shanghai Composite index fell 0.7% to 3,873.32, with sentiment remaining cautious ahead of China’s credit data set to be released in November. Recent reports indicated that new yuan loans dropped significantly in October, indicating weaker consumer demand than anticipated.
In contrast, Australia’s S&P/ASX 200 index managed a slight gain of nearly 0.2%, closing at 8,592.00, supported by strength in gold and mining stocks. The country’s seasonally adjusted unemployment rate remained steady at 4.3%, slightly below the expected 4.4%.
South Korea’s Kospi index fell by 0.6% to 4,110.62, with chipmaker SK Hynix experiencing a 3.8% drop following cautionary warnings from the stock exchange regarding its rapid rise. Taiwan’s Taiex index closed 1.3% lower, while India’s BSE Sensex rose by 0.4%.
U.S. Market Performance and Fed Insights
On Wednesday, the S&P 500 climbed 0.7% to 6,886.68, just shy of its all-time high set in October. The Dow Jones Industrial Average surged by 1% to 48,057.75, and the Nasdaq composite increased by 0.3% to 23,654.16. Investors generally favor lower interest rates for their potential to stimulate economic growth and elevate investment prices, despite concerns about inflation.
The Fed’s decision to cut interest rates did not significantly move markets on its own. However, Powell’s remarks seemed less definitive about restricting future cuts, providing some reassurance to investors. He acknowledged the complexities of the current economic landscape, where the job market is slowing while inflationary pressures persist. Powell noted that interest rates are now positioned in a neutral zone, allowing the Fed time to evaluate future actions based on incoming economic data.
In corporate news, GE Vernova saw its shares soar by 15.6% after the company raised its revenue forecast for 2028, doubled its dividend, and expanded its stock buyback program. Other notable movers included Palantir Technologies, which rose by 3.3%, and Cracker Barrel Old Country Store, gaining 3.5%.
In early trading on Thursday, U.S. benchmark crude oil prices fell by 31 cents to $58.15 per barrel, while the international standard, Brent crude, lost 34 cents to $61.87 per barrel. The U.S. dollar strengthened slightly against the Japanese yen, rising to 156.04 from 156.02, while the euro slipped to $1.1687 from $1.1696.
As regional markets digest these developments, the impacts of Oracle’s earnings and the Fed’s monetary policy will likely continue to shape investor sentiment in the coming days.
