Stocks fell as earnings from megacap companies failed to reassure investors about the durability of the rebound in the artificial intelligence trade this week. Crude oil climbed after tensions flared in the Middle East.
Asian shares fell 0.8%, with the Kospi Index — a barometer for the AI trade — declining 1.8%, and chip heavyweights Samsung Electronics Co. and SK Hynix Inc. in the red. Contracts for the Nasdaq 100 Index slipped 0.9% and those for the S&P 500 dropped 0.5% following a split set of results from Tesla Inc. and Meta Platforms Inc.
Tesla lost 3.3% in post-market trading after cutting its capital-spending forecast. Meta Platforms, however, rose 2.2% after hours as the company boosted its bet on AI with spending outlook. Shares of the semiconductor capital equipment company Lam Research Corp. fell 7.4% in extended trading after a weaker-than-expected earnings forecast.
“The market is a hard one to please on capital expenditure right now,” said Tim Waterer, chief market analyst at KCM Trade. “It frets when companies ramp spending, and it frets when they pull it back, as we’ve just seen with Tesla. In this environment, it’s almost impossible to get the balance right.”
Also weighing on the mood, crude oil advanced after deadly attacks in Saudi Arabia heightened concerns that escalating Middle East hostilities could hit supply. Brent climbed 1.4% to trade above $110 a barrel. Gold declined 0.7% to extend its losses this week and trade around $4,110 an ounce. Treasuries and the dollar were little changed.