Asia Slides, Europe Opens Lower as Oil Tops $110 and AI Doubts Return

Asian stocks fell sharply on Tuesday and Europe opened lower, as oil rose above $110 a barrel and doubts about artificial intelligence spending hit chip shares again. South Korea's Kospi fell 4.3 percent to 5,518.53, the steepest drop in the region, according to Share Talk. Japan's Nikkei 225 fell 1.4 percent to 64,008.53. TipRanks put it 1.30 percent lower, the Topix down 1.43 percent.

Brent crude traded above $110 a barrel on Middle East supply fears. ANZ, cited by Morningstar, pointed to a marked rise in attacks on ships in the Persian Gulf near Hormuz. Investors questioned the funding behind the AI buildout, and money came out of chip stocks. China's central bank left lending rates unchanged, according to NordFX.

Asia close

Hong Kong's Hang Seng fell about 1.2 percent to 23,889.38, according to Share Talk, while TipRanks had it 1.32 percent lower. Shanghai was roughly flat: Share Talk had it down about 0.5 percent at 3,712.42, TipRanks a small rise of 0.12 percent. Australia's ASX 200 lost 0.3 percent to 8,816.90. SoftBank fell about 3.3 percent early, Fujikura lost 3.4 percent and Kioxia weakened, Invezz reported. In Seoul, AI startup Elice fell as much as 33 percent on its debut and closed down 28 percent, see our separate report.

Europe open

The FTSE 100 fell 24.01 points, or 0.2 percent, to 10,740.68 at the open, and the FTSE 250 lost 0.3 percent, according to Morningstar and Alliance News. The CAC 40 fell 0.4 percent and the DAX 0.6 percent. Later, SKN showed the Euro Stoxx 50 down 0.99 percent at 6,083.74, the DAX down 0.94 percent at 25,082.93 and the FTSE 100 down 0.46 percent at 10,715.20. Swiss group ABB fell over 6 percent even after raising full year guidance, Morningstar and Dow Jones reported.

In Britain, unemployment fell to 4.7 percent in the three months to August, from 4.9 percent, the lowest in over a year, the ONS said. Vacancies fell 21,000 to 691,000, a five year low. Our separate story covers the figures in full.

US premarket

Wall Street closed higher on Monday: the S&P 500 rose 0.41 percent to 7,690.73, the Nasdaq Composite rose 1.11 percent to 26,430.89 and the Dow slipped 0.07 percent to 51,966.03, according to Samuel & Co and Share Talk. At 5:34 a.m. Eastern on Tuesday, Nasdaq 100 futures were down 0.46 percent, S&P 500 futures down 0.07 percent and Dow futures up 0.22 percent, TipRanks said. Chips fell before the bell: Micron lost 2.5 percent, SanDisk 3 percent, Intel 1.7 percent, Qualcomm 1.1 percent and CoreWeave 3.2 percent.

Brent futures rose 1.52 percent to $111.22, TipRanks said. Spot gold fell 0.51 percent to $4,118.71, below $4,150 an ounce, Reuters reported. Bitcoin fell about 0.7 percent to near $81,332, Morningstar said, with Reuters near $81,386. Markets price a 92.8 percent chance of a Fed hold on October 27 and 28, per LSEG via Morningstar. Chair Kevin Warsh has given no indication on further hikes, Reuters said.

Key numbers

• Kospi -4.3% to 5,518.53; Nikkei 225 -1.4% to 64,008.53
• Hang Seng -1.2% to 23,889.38; Shanghai flat near 3,712.42
• FTSE 100 -0.2% at the open to 10,740.68, later -0.46% to 10,715.20
• DAX -0.94% to 25,082.93; Euro Stoxx 50 -0.99% to 6,083.74
• Brent above $110 a barrel; futures +1.52% to $111.22
• Gold -0.51% to $4,118.71 an ounce; Bitcoin -0.7% to near $81,332
• UK unemployment 4.7%; vacancies -21,000 to 691,000

Why it matters

Oil above $110 feeds straight into fuel, heating and transport costs, and leaves the Fed less room to cut rates while energy stays expensive. Markets already bet heavily on a hold next week. The AI selloff reaches savers too: the same chip stocks sit inside most pension and index funds.

What happens next

The US reports September housing starts later Tuesday, with 1.305 million expected, per Reuters Morning Bid. Netflix reports Q3 earnings after the close, and General Motors and United Airlines report Tuesday. ECB speakers Kocher and Rehn and BoE rate setter Megan Greene speak, and any rate hint could move nervous markets.