Asian Stocks Fall on AI Slowdown Concerns, Surging Oil Prices

Asian stock markets broadly fell on Monday, pressured by a technology sector sell-off and rising energy prices. Investor sentiment soured after prominent artificial intelligence executives called for a more cautious development pace, raising questions about the sector's growth trajectory, while a spike in crude oil reignited fears of persistent inflation and tighter monetary policy.

AI Stocks Tumble on Development Fears

The technology-heavy losses were triggered by remarks from industry leaders, including Anthropic CEO Dario Amodei and OpenAI CEO Sam Altman, who advocated for slowing the development of the most advanced AI models. This prompted investors to reassess the high valuations and future earnings expectations that have fueled a market rally in AI-related companies.

The sell-off was widespread across the region's key technology hubs. In South Korea, shares of SK Hynix fell 5% and Samsung Electronics lost 2.9%. Other notable decliners included:

• Japan's SoftBank Group, which plunged as much as 13% after OpenAI's CEO stated the company would not go public this year.
• Hong Kong-listed AI developer Z.AI, which dropped 7.5% following concerns of share dilution from a new $5 billion fundraising effort.
• Taiwan's Largan Precision Co., which slumped 10%.

Ad

Reflecting the sector-wide pressure, South Korea's KOSPI index dropped 2.5% and Japan's Nikkei 225 fell 1%. U.S. equity futures also pointed to a weaker open, with Nasdaq 100 Futures down 1.3% in Asian trading.

Oil Surge Amplifies Rate Hike Risks

Adding to market headwinds, Brent crude futures jumped 2.7% to $107.51 a barrel. According to reports, the price increase followed the shutdown of a key Saudi Arabian oil pipeline after drone attacks and the postponement of a meeting between Iran and Gulf states.

The move pushed oil prices firmly above the $100 mark, complicating the global inflation outlook ahead of a critical week for central banks. The Federal Reserve, Bank of England, and Bank of Japan are all scheduled to announce monetary policy decisions. Swap market data indicated that traders are now pricing in a nearly 90% probability of a U.S. interest rate hike on Wednesday, as higher energy costs threaten to keep inflation elevated.