Tech rally extends to Asia on Anthropic, oil falls

Semiconductor stocks are poised for a near-term rebound, given their cheap valuations and improving technical signals, he said. Anthropic filed its long-awaited S-1, moving closer to becoming the first publicly traded company focused primarily on developing advanced AI models. Investors are scrutinizing the filing for clues on AI demand after weeks of doubts over the trade. The renewed optimism follows a volatile week for technology shares.

The Nasdaq 100 tumbled 2.9% on Thursday, a day after Meta Platforms Inc. raised its capital-spending guidance above operating cash flow, rattling investors seeking evidence that massive AI outlays are paying off. That question will be tested again this week when some of the biggest AI spenders report earnings. Alphabet and Microsoft Corp. are due Wednesday, followed by Amazon.com Inc. and Intel Corp. on Thursday.

Investors will be watching their spending plans and, crucially, whether those investments are generating sufficient returns. “The key question is whether this week’s results can restore confidence in the durability of AI-related demand,” said Jung In Yun, chief executive officer at Fibonacci Asset Management Global. “For the recovery to last, we need reassuring earnings guidance and sustained foreign buying,” Yun said.

Elsewhere, Brazilian markets tumbled after President Luiz Inácio Lula da Silva won re-election, fueling concerns that fiscal strains in Latin America’s largest economy will worsen. An election-heavy fortnight may also add to market volatility, wrote Philip Brown, head of research at FIIG Securities. “The US mid-term elections will be the clear focus for markets, but the Israel election also has potential geopolitical ramifications, particularly in regards to the conflict in the Middle East,” he wrote.

The Fed also provides another major test, with policymakers widely expected to leave rates unchanged after raising them in September. Markets are pricing about a 10% chance of a hike Wednesday, compared with more than 70% odds of an increase by year-end. “With so many firms reporting this week, we would typically say that macro factors will take a back seat to idiosyncratic results. However, we have the Fed on Wednesday and what could be a very tricky, complicated press conference,” wrote Christopher Harvey, head of equity and portfolio strategy at CIBC, in a note.