Global risk sentiment was whipsawed on Friday as a sharp pullback in Japanese AI-linked names collided with a partial recovery in US technology shares, while oil prices eased from recent highs and benchmark bond yields remained elevated.
Japan’s Nikkei 225 fell more than 1% in afternoon trade to around 68,266.74, leaving the index roughly 3.4% below Tuesday’s close above 70,680. SoftBank Group dropped more than 6%, with Kioxia Holdings and other semiconductor names also sliding. The sell-off reflected the Nikkei’s heavy AI concentration: technology accounted for about 44.7% of the index by weight, and Advantest, Tokyo Electron and SoftBank together represented almost 29%.
The retreat was triggered in part by a Financial Times report that OpenAI’s annualised revenue was running at about $50 billion at the end of September, roughly $20 billion below a figure previously signalled to investors and media. The update intensified questions over whether AI revenue growth can justify the scale of investment being planned.
US markets had also weakened on Thursday, with the Nasdaq Composite losing 1.25% and the S&P 500 declining 0.47%, although the Dow Jones Industrial Average edged 0.1% higher. On Friday, however, the Nasdaq opened higher, gaining 172 points, while the S&P 500 rose 0.35% and the Dow added 0.24%. Nvidia shares rose 0.47%, Tesla gained 2.63%, Amazon and Alphabet edged higher, and the iShares Semiconductor ETF advanced 0.78%.
Oil prices retreated after Donald Trump said the US would not attack Iran before the November 3 midterm elections, easing some fears of further supply disruption. Brent crude declined more than 1% but remained above $100 a barrel, after jumping more than 4% on Thursday. The US 10-year Treasury yield was steady around 5.2% to 5.25%, close to a 24-year high of 5.37% reached earlier in the week. Higher oil and borrowing costs continue to pressure risk assets, particularly for a major energy importer such as Japan, and reinforce global inflation concerns.
Investors are also questioning how the next phase of AI infrastructure will be financed. Broadcom, Oracle and SpaceX are seeking tens of billions of dollars for chips and data-centre expansion, while Nvidia-backed Australian operator Firmus shelved a planned $5 billion IPO, citing volatile market conditions. Charu Chanana, chief investment strategist at Saxo, said higher yields are forcing investors to demand stronger AI economics, better cash generation and healthier balance sheets.
Elsewhere, SpaceX shares climbed 2.9% after agreeing to acquire a nationwide low-band spectrum portfolio, which weighed on telecom incumbents: T-Mobile US fell 9%, AT&T declined 7.7% and Verizon slipped 6.3%. Apple dropped 2.5% after reports it asked some suppliers to reduce production of components for the newly launched iPhone 18 Pro models, while Delta Air Lines fell 2.43% after cutting its annual profit forecast. Japan’s domestic data offered little support as real household spending fell 3.1% year-over-year in August, adding to concerns about the strength of the consumer economy.
For crypto and other risk-sensitive digital assets, the macro backdrop remains the key external variable: elevated Treasury yields and still-high energy prices are keeping financing conditions tight, even as some equity sectors attempt to stabilise.
