At a Glance
Elice Group plunged nearly 30% below its IPO price, while South Korea’s KOSPI fell almost 4%.
Goldman Sachs expects five major AI hyperscalers to spend around $1.2 trillion next year.
Rising oil prices are adding inflation concerns as investors assess interest-rate risks.
Netflix, SpaceX, GE and other major companies are due to report earnings.
A sharp selloff in South Korea has raised fresh questions about AI investment returns just as tech giants prepare to reveal their earnings and spending plans.
South Korea’s latest tech selloff is putting the spotlight on a critical question for global markets: how much will the AI boom actually pay off?
AI infrastructure startup Elice Group sank nearly 30% below its initial public offering price on Tuesday, while the tech-heavy KOSPI dropped almost 4%. The declines came ahead of a week of closely watched announcements from the world’s largest technology companies.
Meta Platforms, which reports results on Wednesday, is among five major AI hyperscalers expected to increase combined capital expenditure to around $1.2 trillion next year, according to Goldman Sachs.
With investment plans expanding and borrowing costs rising, investors are questioning whether the returns will justify the expense. State Street Investment Management’s Ninghui Liu said the key issue is whether AI spending can generate returns above its financing costs.
Markets Brace for Earnings and Inflation Risks
Oil prices resumed their climb amid uncertainty over possible US sanctions relief for Russian energy exports and renewed violence in the Middle East.
Higher energy prices are complicating the outlook for central banks. Recent comments from Federal Reserve officials suggest policymakers are in no rush to raise rates again.
European stocks opened lower, with Euro Stoxx 50 futures down 0.63%, DAX futures falling 0.39% and FTSE futures losing 0.48%. S&P 500 futures edged up 0.1%.
What Traders Should Watch
Investors will track earnings from Netflix, SpaceX, General Motors, GE and 3M, alongside US housing data, UK jobs figures and European economic surveys. Updates on AI spending and expected returns could prove just as important as headline earnings numbers.
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Source: Reuter
Time: 1:00 PM EEST
