Asian shares traded mixed on Monday while oil prices fell more than 1% after climbing to their highest levels in more than four years last week. US stock futures edged higher.
Investors were preparing for major corporate earnings reports and central bank decisions expected to influence financial markets this week. Alphabet, Microsoft's parent competitor in the technology sector, and Amazon are among the major companies scheduled to report results, alongside Google’s parent company, Alphabet, and Microsoft.
Tokyo's Nikkei 225 declined 0.8% to 62,189.65 as technology stocks faced renewed selling pressure. Chip-testing equipment maker Advantest dropped 3.9%, while Tokyo Electron, a manufacturer of semiconductor and flat-panel production equipment, lost 3.7%. The Bank of Japan is scheduled to announce its key interest rate decision later this week.
South Korea's Kospi fell 1.5% to 5,469.47, with Samsung Electronics down 1.1%. Hong Kong's Hang Seng gained 0.5% to 23,206.82, while the Shanghai Composite rose 0.2% to 3,697.52. Australia's S&P/ASX 200 also recovered from early losses, advancing 0.2% to 8,809.90.
Brent crude, the international benchmark, fell 1.4% to $110.12 a barrel, while US benchmark crude dropped 1.8% to $101.37. On Friday, Brent had surged 3.1% to $116.72, its highest closing level since June 2022.
On Wall Street, the S&P 500 fell 0.5% on Friday, recording its second consecutive weekly loss. The Dow Jones Industrial Average dropped 1.2%, while the Nasdaq Composite declined 0.2%.
AI-related stocks showed mixed resilience, with Micron Technology gaining 2.5%, Intel rising 1.7%, Microsoft adding 0.7% and Advanced Micro Devices advancing 1.7%.
Investors remain concerned about whether heavy spending on artificial intelligence can justify elevated stock valuations, particularly as borrowing costs remain high.
“This week is less about broad conviction and more about proof,” said Stephen Innes of SPI Asset Management, highlighting pressure on major technology companies to demonstrate returns on their investments.
Treasury yields edged higher as inflation concerns and government debt weighed on markets. Investors expect the Federal Reserve to maintain interest rates this week, although markets increasingly anticipate another hike in December.
The US personal consumption expenditures price index, the Fed's preferred inflation measure, is expected to show inflation at 3.7% in September, well above its 2% target.
The US war with Iran has sharply reduced global oil supplies, pushing up energy costs and increasing prices for goods ranging from fuel to food and clothing.
In currency trading, the dollar slipped to 156.94 yen from 156.99 yen, while the euro fell to $1.1216 from $1.1223.