Asian shares slide post Broadcom forecast, oil prices slip
Asian shares fell 0.9% after Broadcom Inc.'s weak outlook triggered a 14% drop, testing the AI-driven market rally, while oil prices slipped following a US-brokered Israel-Lebanon ceasefire. The Nasdaq 100 futures also retreated 0.5%, and concerns over higher interest rates and geopolitical tensions weighed on investor sentiment globally.
Asian stock markets declined on Thursday, with the MSCI Asia Pacific Index dropping 0.9% as Broadcom Inc. fell 14% after delivering a disappointing earnings outlook. The chipmaker’s underwhelming forecast raised doubts about the sustainability of the AI-driven market rally, which has propelled global equities to record highs, particularly in semiconductor stocks. South Korea’s market saw a 1.6% decline, while futures for the Nasdaq 100 Index retreated 0.5%, reflecting broader investor caution. The pullback in AI-related stocks continued as UBS Group AG’s basket of AI winners fell 1.4%, ending a four-session winning streak. Some analysts warned the AI market may be showing signs of a speculative bubble. Meanwhile, renewed geopolitical tensions, including US-Iran clashes, and fears of prolonged high interest rates contributed to a risk-off sentiment. Bitcoin also dipped 2.8% to around $63,000, extending losses from Wall Street’s pullback, where the S&P 500 snapped a nine-day winning streak. Oil prices provided brief relief after the US announced a ceasefire between Israel and Lebanon, causing Brent crude to fall 0.9% to below $97.00 per barrel. The Bloomberg dollar gauge also edged lower, while the Japanese yen hovered near 160 per dollar following Bank of Japan Governor Kazuo Ueda’s mixed signals on a potential interest rate hike this month. US labor market resilience further pressured markets, with companies adding the most jobs since January 2025, reinforcing expectations that the Federal Reserve may raise interest rates later this year. Fed officials, including Dallas President Lorie Logan and New York President John Williams, suggested uncertainty remains over future rate moves. Investors awaited Thursday’s weekly jobless claims data and Friday’s monthly employment report for further clarity. The broader market downturn highlighted tensions between AI-driven growth expectations and persistent macroeconomic concerns, including inflation and geopolitical risks. The decline in Asian and US markets signaled a potential shift in investor confidence amid mixed economic signals.
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