Asia stocks fall on mixed megacap earnings, oil rises

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. The latest corporate results will test whether earnings can keep the AI trade on track as investors weigh strong growth against the mounting cost of funding the industry’s expansion. Concerns have grown that heavy spending on data centers and computing capacity may take longer to generate returns, while this year’s blistering stock rally has raised questions about stretched valuations and the risk of an AI bubble.

“This US earnings season is a big test on AI profitability,” said Anna Wu, an investment strategist and founder of Floodlines Research. The post-market drops for Tesla and Lam Research “puts the AI confidence back in the air again,” she said. Doubts over the economics of the AI boom have rattled markets recently, with shareholders demanding clearer evidence that enormous outlays on infrastructure will eventually pay off.

The repricing has been sharp. The Nasdaq 100 lost 5.5% last week, its steepest weekly decline since President Donald Trump unveiled global tariffs in April 2025. The Philadelphia Semiconductor Index slid for eight consecutive sessions, marking its longest run of losses since October 2008. Prominent investors have added to the skepticism. Billionaire Ken Griffin said markets are “almost certainly” experiencing an AI bubble as businesses wrestle with investment decisions and the technology’s economic impact.

Ray Dalio earlier this month warned that AI is a “classic bubble” that is nearing a bursting point thanks to rising interest rates and the need to turn wealth into cash. Elsewhere, the Bank of Korea kept its benchmark interest rate unchanged, pausing after a rare back-to-back increase aimed at containing inflation fueled by an unprecedented semiconductor-led economic boom. Attention is also on the rising tensions in the Middle East and the oil market.

Oil rose following a deadly attack on a Saudi oil field, raising concerns that escalating hostilities in the Middle East could hit supply even as exports through the Strait of Hormuz have accelerated in recent months. The US State Department issued an ordered departure for non-emergency personnel and their families from Saudi Arabia because of the growing threat from Houthi militants in neighboring Yemen.

The US and Israeli militaries have developed specific plans for renewed strikes against Iran after the American midterm elections, the New York Times reported, citing US officials and other people briefed on the deliberations. Investors aren’t “comfortable with oil rising above 110,” said Rajeev De Mello, a global macro portfolio manager at Gama Asset Management. “We are regularly making new highs in oil and energy products, which is stagflationary.

Implied volatility on oil options is rising once again, reflecting uncertainty about the future path of energy as we approach the Northern Hemisphere winter.”