Global markets retreat as tech mood sours, oil prices jump

Global equity markets mostly sank Thursday as tech firms resumed their downward spiral following a mixed bag of earnings from Wall Street titans, while sentiment was also soured by rising oil prices.

AI-linked companies continued their rollercoaster ride since hitting record highs in June amid worries over colossal investment sums and their timeline for profitability, with growing debt-servicing costs adding to the uncertainty.

On Wednesday, a blockbuster quarterly report from Elon Musk's SpaceX -- its second since listing in June -- provided what some hoped would be solid support leading into a crucial earnings season, lifting all three main Wall Street indexes.

But mixed after-hours releases from Meta and Tesla muddied the waters again for investors.

"Risk-off sentiment is returning amid high geopolitical tensions and a swirl of worries about financing the AI juggernaut," noted Susannah Streeter, chief investment strategist at Wealth Club.

Rising oil prices also dragged on markets, with Brent futures gaining four percent to $113.17 per barrel as Iran's Revolutionary Guards threatened to strike American bases across the Middle East if the US military continues to escort ships through the Strait of Hormuz.

Most of the biggest AI players still haven't reported results yet, but markets were not thrilled with reports released late Wednesday.

Electric vehicle-maker Tesla announced lower profits in July-September and cut its capital spending forecast for this year, while Facebook-parent Meta lifted its estimates for how much it would spend on artificial intelligence.

Shares in Tesla shed 3.1 percent in New York, while those in Meta slumped 7.0 percent.

Wall Street's main indices moved lower, with the tech-heavy Nasdaq Composite dropping 2.6 percent.

Briefing.com analyst Patrick O'Hare cited Meta's spending plans as a catalyst, along with a cautious outlook from Lam Research citing supply chain constraints as a problem.

Such dynamics suggest "companies won't be able to grow as much as has been afforded in their stock trade," said O'Hare, who pointed to strong demand for US Treasuries as evidence investors are seeking low-risk investments.

"Investors are seeking some safety under the theory that perhaps this AI trade could get unruly," he said.

Microsoft, Amazon and Alphabet are due to report next week, with Apple and Nvidia up in November.

Asian tech stocks sank Thursday, dragging broader markets with them, with South Korean chipmakers SK hynix and Samsung down 5.5 percent and four percent respectively.