Asian markets sink on AI spending fears, oil surge

October 23, 2026 (MLN): Asian markets traded lower on Friday, following a sell-off on Wall Street as concerns over rising artificial intelligence (AI) investment costs and a sharp increase in oil prices dampened investor sentiment.

South Korea led regional losses, with the benchmark Kospi declining 2.42% and the tech-heavy Kosdaq falling 2.6%. Japan’s Nikkei 225 dropped 2.1%, while Hong Kong’s Hang Seng Index lost 0.47%.

Mainland China’s CSI 300 fell 1.76%, extending its decline into technical bear-market territory, while Australia’s S&P/ASX 200 slipped 0.21%.

The weakness followed a broad decline in US technology stocks, with the sector falling 3% amid concerns over the scale and sustainability of AI-related spending. Nvidia shares dropped 4.4%, Alphabet declined 3.2%, and Advanced Micro Devices (AMD) fell 8.1%, according to CNBC.

Nvidia Chief Executive Officer Jensen Huang said on Thursday that capital was becoming increasingly scarce relative to demand for funding across the AI infrastructure buildout, highlighting financial pressures within the emerging neocloud segment.

Treasury yields declined on Thursday as investors sought safer assets. The 10-year Treasury yield fell 18.5 basis points to 4.961%, while the 30-year yield dropped 15 basis points and the two-year yield decreased 17.5 basis points.

Oil prices added to market concerns after a report indicated that the United States and Israel were preparing plans for renewed attacks on Iran amid the regional conflict that began in late February. Brent crude surged 4% to settle at $113.17 per barrel, its highest closing level since May.

On Wall Street, the S&P 500 was on track for a marginal weekly gain of less than 0.1%, while the Nasdaq was heading for a 0.5% decline. The Dow Jones Industrial Average was set to advance 1.7% over the week.

Investors will also monitor the final reading of the University of Michigan’s consumer sentiment survey for further indications of US economic conditions.

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