Asian Stocks Mixed After Nvidia's Wall Street Losses, AI Job Cut Concerns

Alanbatnews -

Asian stock markets displayed a mixed performance on Friday, reacting to significant losses experienced by Nvidia shares on Wall Street and growing anxieties surrounding AI-related job cuts.

In Japan, the Nikkei 225 index edged up by 0.1% to reach 58,810.03 points. Hong Kong's Hang Seng Index surged by 0.8% to 26,578.03 points, while China's Shanghai Composite Index declined by 0.3% to 4,139.53 points.

South Korea's Kospi index fell approximately 0.6% to 6,288.40 points as investors engaged in profit-taking following previous gains. Australia's S&P/ASX 200 index rose by 0.1% to 9,184.10 points, while India's Sensex index decreased by 0.4%.

U.S. stock futures also reflected the cautious sentiment, with S&P 500 futures down by 0.2% and Dow Jones Industrial Average futures falling by 0.4%. On Thursday, the S&P 500 closed down 0.5% at 6,908.86, the Dow Jones Industrial Average rose marginally to 49,499.20, and the Nasdaq Composite declined 1.2% to 22,878.38, weighed down by technology stocks.

The moves across Asian markets followed Nvidia's worst performance since the spring, putting pressure on U.S. benchmarks and prompting investors to reassess their positions in the technology sector.

Adding to market unease were comments from Block CEO Jack Dorsey regarding plans to lay off roughly 40% of the company's workforce as part of a strategic shift toward labor-saving AI tools.

Despite Nvidia reporting another quarter of strong earnings growth and exceeding revenue expectations for the current quarter, its stock tumbled 5.5%, signaling that exceptional performance may already be factored into the market.

Conversely, Block shares initially rose 5% before the release of its better-than-expected results, then jumped over 20% in after-hours trading following Dorsey's announcement of the planned layoffs of approximately 4,000 employees out of 10,000, as part of a restructuring to make the company leaner, faster, and more AI-focused.

Stephen Innes of SPI Asset Management noted that Dorsey had taken a step that had long been discussed in boardrooms, adding that AI had transitioned from being a theoretical threat to jobs to a practical reality reshaping corporate structures and management styles.

An economic report indicated a slight increase in U.S. jobless claims last week, aligning with analysts' expectations while remaining at historically low levels, reflecting the continued strength of the labor market.

Seven out of ten stocks within the S&P 500 saw gains, with Salesforce shares climbing 4% after announcing better-than-expected quarterly results. However, companies in the transportation, logistics, and financial services sectors faced selling pressure amid concerns that the accelerating adoption of AI could erode traditional business models.

In after-hours trading, Netflix shares jumped 9.2% after withdrawing from the bidding for Warner Bros. Discovery assets, potentially clearing the way for Paramount Global, backed by Skydance Media, to strengthen its position in a potential deal. Netflix explained that the asking price, after Paramount's offer exceeded theirs, made the acquisition economically unviable.

Warner Bros. shares declined 0.3% after the company reported a quarterly loss of $252 million.