Stocks slump, bonds leap as AI giants’ spending spooks investors
Asian tech stocks slumped and bonds surged as huge AI spending by Alphabet, Intel and Amazon sparked fears over returns, wiping US$500 billion off Alphabet’s value.
Oct 30, 2026, 12:47 PM
SINGAPORE – Tech shares slumped in Asia on Oct 30, the yen rose and bonds surged towards their biggest monthly gain in nearly three years as investors scurried to safety against worries that huge and rising AI spending may not deliver sufficient returns.
Shares in Google parent Alphabet fell 12.6% on Wall Street and slid a little further after hours, to wipe out a withering US$500 billion (S$640 billion) in market value, as massive artificial intelligence spending turned the company’s cash flow negative.
An aftermarket plunge of 23% in Intel shares and a drop of 7% in Amazon stocks, as they too burned through cash, drove Nasdaq 100 futures down 1.4% and sent stocks of chipmakers around Asia into a tailspin.
“The market isn’t necessarily questioning whether the AI build-out can be financed,” said Pepperstone analyst Chris Weston.
“It’s increasingly questioning whether shareholders will earn an adequate return on the enormous capital being deployed.”
Nerves were also frayed by a potentially record-breaking hack at Binance, the world’s biggest cryptocurrency exchange, which drove down Bitcoin, other cryptocurrency prices and stocks including rival exchange Coinbase.
South Korea’s KOSPI slumped 5% for an October fall of more than 17%. Japan’s Nikkei fell 3%.
BOJ expected to hold
Investors’ rush into bonds was further spurred further by the US Federal Reserve’s decision on Oct 28 to keep US interest rates on hold, with no firm projection of when it might need to hike next.
Benchmark 10-year US Treasury yields fell by more than 7 basis points (bps) in Tokyo trade on Oct 30 to 4.91% for a fall of some 37 bps through October – the largest one-month drop since December 2023.
Two-year yields dropped by more than 8 bps to 4.57% and Fed funds futures rallied as investors dialled back some expectations for US rate hikes. Yields fall when bond prices rise.
The Bank of Japan is expected to leave rates on hold later on Oct 30 in a decision that will cap a week of major central bank meetings.
The risk-averse mood strengthened haven currencies such as the yen and Swiss franc, with the yen up about 0.2% at 157.47 per US dollar and the franc at 0.8213 to the dollar and not far from a one-month high.
The euro inched up 0.1% to $1.1194.
“Key to watch will be how BOJ characterise the recent global bond market volatility,” said Howe Chung Wan, head of Asian fixed income at Principal Asset Management.
Investors would watch for how the moves influenced the bank’s assessment of the current status of monetary policy, and whether it remains accommodative or is close to approaching neutral, he added.
“This will guide the market for the pace and extent of further tightening in 2027.” REUTERS
Source: The Straits Times https://www.straitstimes.com/business/stocks-slump-bonds-leap-as-ai-giants-spending-spooks-investors?ref=latest
