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Asia shares falter as global tech selloff spooks investors
Investors have been rotating out of technology giants and into cyclical stocks amid fears of AI disruptions to jobs.
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Reuters - Wed, 04, Feb 2026
- 22:51 EST
- 12
A stock quotation board is reflected on window glasses at a building in Tokyo, Japan Dec. 11, 2025. / REUTERS/Issei Kato
Asian stocks faltered as concerns about the exploding costs of AI investment hounded the tech sector, though Wall Street futures were trying to make a comeback as chip providers gained.
Google parent Alphabet reported solid results after the bell, but it was targeting capital expenditure of $175 billion to $185 billion this year, sharply above analysts' estimates. Shares swung wildly - down over 6 per cent at one point -before settling just 0.4 per cent lower after-hours.
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Investors have been rotating out of technology giants and into cyclical stocks amid fears of AI disruptions to jobs. The recent selloff, triggered by a new legal tool from Anthropic's Claude large language model, has wiped out about $830 billion in market value since Jan. 28.
Disappointing earnings results from Advanced Micro Devices didn't help either, with the chipmaker tumbling 17 per cent overnight.
"That increase in (Alphabet) capex was absolutely enormous," said Tony Sycamore, analyst at IG.
"At a time when everyone is hyper-sensitive and hyper-nervous about what's going on with the software companies, with what's going on with CAPEX and AI valuations... I would have thought the reaction would be quite negative, but it's not flowing through to the Nasdaq futures."
The demand for more equipment spending helped chip giant Nvidia rally almost 2 per cent after the bell, partially reversing a 3.4 per cent tumble overnight. That likely lifted Nasdaq futures 0.6 per cent and S&P 500 0.4 per cent.
Still, MSCI's broadest index of Asia-Pacific shares outside Japan skidded 1 per cent. South Korea's KOSPI tumbled 1.7 per cent and Taiwanese shares lost 0.7 percent.
Japan's Nikkei was flat.
Chinese blue chips lost 0.7 per cent, while Hong Kong's Hang Seng index slid 0.8 per cent.
Much attention is on Amazon's results later in the day, as well as policy meetings from the Bank of England and the European Central Bank where rates are expected to be on hold.
YEN WEAK AHEAD OF JAPAN ELECTION
The Japanese yen nursed a fourth straight day of losses ahead of a general election on Feb. 8 where polls are tipping a decisive victory for Prime Minister Sanae Takaichi, endorsing her spending ambitions that have raised concerns about the nation's strained finances.
The dollar was steady at 156.93 yen, having rallied 3 per cent from its low of 152.1 yen when chatter that the New York Federal Reserve conducted rate checks sent the Japanese currency flying high.
In the Treasuries market, the benchmark 10-year yield was flat at 4.2715 per cent. The U.S. nonfarm payrolls report for January has been pushed back from its scheduled release on Feb. 6 to Feb. 11 due to a four-day partial government shutdown that has now ended.
Oil prices fell on Feb. 5 after two straight days of gains as the U.S. and Iran agreed to hold talks in Oman on Feb. 6, despite differences about the agenda.
U.S. West Texas Intermediate crude fell 1.4 per cent to $64.23 per barrel, while Brent crude futures also dropped 1.4 per cent to $68.47 per barrel.
Gold and silver prices were up a little in early trade after an epic implosion on Jan. 30 that saw the two plunging from lofty record highs.
Gold rose 0.3 per cent to $4,976 an ounce while silver inched up 0.2 per cent to $88.20 an ounce.
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