Trump says Iran decision is near as US strike options are readiedLula wins fourth term as Bolsonaro refuses to concedeStudent List wins Serbian election as Vučić concedesHouthis keep striking Saudi Arabia as Riyadh airport partly reopensNearly 1,300 arrests in France as protests spread to Spain and ItalyIsrael heads into deadlocked election as Trump again backs NetanyahuIsrael seals West Bank for election as Hebron displacement growsMachado returns to Venezuela, challenging US-backed interim governmentMass drone strikes kill civilians in Ukraine and RussiaTrilateral Ukraine talks planned for November as Oleshky truce nearsCongo begins Ebola vaccine trial as Uganda orders quarantine for returneesMali military raises attack death toll to 54Dozens killed as gunmen on motorcycles raid Nigerian villageChina opens fifth plenum with Xi set to tighten party disciplineThousands mourn Jordan church attack victims as gunmen remain at largeAudi to build $4.2bn US plant, announced at Trump rallyKim Jong Un makes surprise China trip as Pyongyang calls landmine incident a fabricationBrent eases from six-month high as Iran risk keeps energy markets tightSpaceX closes $40bn debt financing for AI chipsAI spending fears weigh on stocks and credit ahead of earnings weekObama attacks Trump as Justice Department defends Alaska Senate suitIsraeli strikes kill several in Gaza, including at Islamic UniversitySingapore urges suppliers to honour gas contracts as haze probe widensDrilling rig sinks off Gabon with five missingKenya bus crash kills at least 22 church mournersBulgaria's presidential vote heads to run-off as turnout hits record lowAlgeria approves first foreign troop deployment since 1973, to NigerFrench bond rout sits at heart of ECB succession fightUS and Canada near tariff deal, Trump saysStorms Boelo and Austen cut power to 150,000 homes in northern EuropeUK PM Burnham open to revisiting EU free movementLe Pen launches 2027 presidential bid amid protestsUAE closes more beaches over Gulf oil slickJapanese firms compensate customers after cyberattacksPolice officer suspended as Tirana protests turn violentMusk and Kyiv dispute Starlink terms after service resumesHaiti remains may be missing Salvadoran soldiersTrump says Iran decision is near as US strike options are readiedLula wins fourth term as Bolsonaro refuses to concedeStudent List wins Serbian election as Vučić concedesHouthis keep striking Saudi Arabia as Riyadh airport partly reopensNearly 1,300 arrests in France as protests spread to Spain and ItalyIsrael heads into deadlocked election as Trump again backs NetanyahuIsrael seals West Bank for election as Hebron displacement growsMachado returns to Venezuela, challenging US-backed interim governmentMass drone strikes kill civilians in Ukraine and RussiaTrilateral Ukraine talks planned for November as Oleshky truce nearsCongo begins Ebola vaccine trial as Uganda orders quarantine for returneesMali military raises attack death toll to 54Dozens killed as gunmen on motorcycles raid Nigerian villageChina opens fifth plenum with Xi set to tighten party disciplineThousands mourn Jordan church attack victims as gunmen remain at largeAudi to build $4.2bn US plant, announced at Trump rallyKim Jong Un makes surprise China trip as Pyongyang calls landmine incident a fabricationBrent eases from six-month high as Iran risk keeps energy markets tightSpaceX closes $40bn debt financing for AI chipsAI spending fears weigh on stocks and credit ahead of earnings weekObama attacks Trump as Justice Department defends Alaska Senate suitIsraeli strikes kill several in Gaza, including at Islamic UniversitySingapore urges suppliers to honour gas contracts as haze probe widensDrilling rig sinks off Gabon with five missingKenya bus crash kills at least 22 church mournersBulgaria's presidential vote heads to run-off as turnout hits record lowAlgeria approves first foreign troop deployment since 1973, to NigerFrench bond rout sits at heart of ECB succession fightUS and Canada near tariff deal, Trump saysStorms Boelo and Austen cut power to 150,000 homes in northern EuropeUK PM Burnham open to revisiting EU free movementLe Pen launches 2027 presidential bid amid protestsUAE closes more beaches over Gulf oil slickJapanese firms compensate customers after cyberattacksPolice officer suspended as Tirana protests turn violentMusk and Kyiv dispute Starlink terms after service resumesHaiti remains may be missing Salvadoran soldiers
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Symbolic image: AI spending fears weigh on stocks and credit ahead of earnings weekSymbolic image

AI spending fears weigh on stocks and credit ahead of earnings week

2 sources

Worries about AI profitability are spreading from US tech shares to Asian markets and risky debt. Asia's busiest earnings week now puts the AI boom to the test.

After the US tech selloff on Thursday, Bloomberg reports that Goldman Sachs cut its 12-month Kospi target by 25%, and describes the AI trade as unravelling. Bloomberg adds that fears over AI spending threaten to swamp Big Tech's strong earnings. It also quotes Apollo's Slok as saying AI has delivered zero payoff outside of tech. The Asian earnings season starting Monday, 26 October, is the next test.

Stress reaches risky debt

The strain has spread to the riskiest corporate debt, which Bloomberg calls a "total meltdown". Bloomberg also asks whether a 50% yield is plausible in the AI trade after CoreWeave. The Wall Street Journal reports that Treasury yields fell over the week as turmoil subsided.

China's self-reliance drive exposed

Nikkei Asia reports that doubts about AI profitability are weighing on Chinese stock markets. Home-grown AI is central to Beijing's strategy of technological self-reliance.

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