Asian stocks slip, Wall Street and bonds benefit from oil dip

Published Mon, Oct 19, 2026 · 09:37 AM — Updated Mon, Oct 19, 2026 · 01:31 PM

[SYDNEY] Asian share markets mostly slipped on Monday (Oct 19) as unease over artificial intelligence’s enormous funding needs undermined confidence ahead of a week packed with corporate earnings, while Chinese economic data pipped forecasts in a positive signal for global growth.

A fall in oil prices offered some support to bonds and Wall Street stock futures, limiting Asia’s losses.

Oil fell following US President Donald Trump’s decision to waive some sanctions on Russia, though he later said a final decision on the matter had not been made.

US Secretary of State Marco Rubio said on Saturday that the president would take up to 60 days to assess the economic impact of such a move.

Brent futures still fell 1.8 per cent to US$107.83 a barrel, while US crude futures lost 1.2 per cent to US$100.20 a barrel.

Meanwhile, Iran reported another tanker had hit a mine in the Strait of Hormuz, while the cost of shipping and insurance was keeping oil prices for actual delivery a lot higher.

Geopolitical tensions combined with safe haven flows from equities to extend a rally in sovereign bonds, with 10-year Treasury yields down 4 basis points at 5.0525 per cent, having just recorded their largest weekly fall in over eight months.

All of this helped S&P 500 futures edge up 0.8 per cent, while Nasdaq futures rose 1.3 per cent.

Asian markets were hampered by concerns about tech, with Japan’s Nikkei falling 0.7 per cent after losing 5.4 per cent last week.

South Korea added 0.6 per cent, having shed more than 14 per cent last week, while Taiwan fell 1.1 per cent.

MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.2 per cent.

“Investors have long worried that AI revenues won’t be sufficient to recoup the massive upfront investment, while AI infrastructure may need to be written down as it ages and depreciates in the meantime, which lowers book value massively,” said My Bui, an economist at fund manager AMP.

“Rising government bond yields and wider corporate credit spreads are increasing financing costs, making it harder to borrow, refinance, and keep the AI infrastructure buildout going.”

Jakarta’s equity benchmark slumped 5 per cent as the world’s worst performer reeled from index provider MSCI saying it was considering shifting Indonesia to “standalone” status from its current “emerging markets” mantle.

Chinese blue chips nudged up 0.1 per cent after data showed the economy grew 4.5 per cent in the third quarter to just pip forecasts.

Retail sales were also better with a rise of 1.1 per cent, while industrial output growth came in on forecasts at 5.5 per cent.

China’s yuan also firmed to its strongest level since July 2022 at 6.6828 per US dollar.

A lot riding on earnings

The PHLX Semiconductor Index shed 11.4 per cent last week in its longest losing streak since 2008.

Investors will be hoping Meta will beat Wall Street forecasts when it announces earnings on Wednesday, when semiconductor firms Lam Research and Texas Instruments and Elon Musk-led Tesla also report.

Results from Musk’s SpaceX are due on Tuesday.

Meta is one of five AI hyperscalers that combined are expected to increase their capital spending to about US$1.2 trillion in 2027, according to Goldman Sachs.

Meta alone expects to spend US$130 billion to US$145 billion on capex in 2026, and any increase in that could unsettle investors.

The group needs to make US$62.5 billion to just hit the midpoint of its own revenue guide.

Others reporting this week include Netflix, Procter & Gamble, General Motors and GE Aerospace.

Earnings are still expected to rise 30 per cent overall thanks to the huge profits made by tech firms.

European stocks were weighed down by political uncertainty in France with Eurostoxx 50 futures off 0.3 per cent, while DAX futures lost 0.2 per cent and FTSE futures eased 0.1 per cent.

Those same concerns saw the euro dip 0.1 per cent to US$1.1232, nearer to last week’s 16-month low of US$1.1113.

The US dollar was flat on the yen at 158.07 and has spent the entire month so far in a tight range as the threat of Japanese intervention has kept speculators at bay.

In commodity markets, non-interest-bearing gold got a lift from falling yields and rose 0.4 per cent to US$4,181 an ounce. REUTERS