Today's Edition
SYDNEY/LONDON (REUTERS)
Global shares declined on Tuesday as investors grew nervous ahead of Nvidia's earnings, critical for sentiment around soaring AI valuations, which some fear may be entering bubble territory.
Investors were also concerned about a weakening US economy, with expectations for near-term US Federal Reserve rate cuts continuing to recede.
US S&P futures shed 0.5% while Nasdaq futures were off 0.6%. Europe's STOXX 600 shed 1.4% taking its loss since Friday to 2.9% - its sharpest four-day drop since early April. The region's volatility index touched its highest level in a month.
"There are plenty of excuses to take risk off the table - earnings from Nvidia tomorrow, which are huge, payrolls on Thursday, and also I think there's a general vibe of exhaustion," said Michael Brown, senior research strategist at Pepperstone.
Bitcoin earlier slid below $90,000 for the first time in seven months.
Analysts noted that on Monday the S&P 500 and Nasdaq closed below their 50-day moving averages for the first time since April 30.
Chipmaker Nvidia reports quarterly earnings on Wednesday, with investors watching for any signs of weakness in the sector.
Markets also noted news that tech billionaire Peter Thiel’s hedge fund sold its entire Nvidia stake in the third quarter.
Adding to the pressure were comments from Alphabet CEO Sundar Pichai warning that no company would remain unscathed if the AI boom collapses, as soaring valuations and heavy investment fuel concerns of a bubble.
Tech stocks in Asia were particularly hard-hit overnight, with SoftBank Group, chip-related Tokyo Electron and Advantest down between 3.7% and 7.5%.
Amazon is set to raise $15 billion from its first US dollar bond offering in three years, according to a filing with the Securities and Exchange Commission on Monday.
On Tuesday, Bank of America's monthly fund manager survey found a record share of investors think companies are "overinvesting", a sign spending by hyperscalers may need to slow down.
Japanese government bonds also slumped on worries about Prime Minister Sanae Takaichi's ballooning spending plans.
Bank of Japan Governor Kazuo Ueda said on Tuesday he told PM Takaichi that the central bank was gradually raising interest rates to guide inflation smoothly towards its 2% target, in remarks that keep markets guessing on timing of hikes.
Elsewhere, gold was down 0.2% to $4,036 an ounce while Brent crude futures slipped 0.4% to $63.92 a barrel.
Bitcoin was off 0.6% at $91,288.06 and down about 30% from its peak.
The dollar rose to a more than nine-month high against the yen before easing, while edging down versus the euro.
