Asian markets diverged on Wednesday as optimism surrounding the artificial intelligence sector offset concerns regarding US inflation data and potential interest rate hikes. While Tokyo, Seoul, Taipei, Singapore, and Jakarta saw gains, losses were recorded in Hong Kong, Shanghai, Sydney, Wellington, and Manila.
Tech stocks have rebounded this week following a period of heavy selling driven by fears of increased regulation and rising borrowing costs. Confidence in the sector was bolstered by reports from several major players. Data center operator CoreWeave projected annual sales between $13 billion and $13.3 billion, exceeding previous estimates. Additionally, Bloomberg reported that OpenAI earned $10 billion in quarterly revenue for the first time during the July-September period, representing a nearly threefold increase year on year.
Anthropic also contributed to the sector's momentum through a recent filing regarding its upcoming initial public offering. The company plans to raise up to $64 billion, which would value the maker of the Claude AI agent at as much as $1.4 trillion. The filing also noted that Anthropic's third-quarter revenue reached $17 billion, up from $1.4 billion a year earlier.
Despite the tech rally, US consumer prices rose 0.4% month on month in October, exceeding the 0.3% forecast. While energy price increases moderated, costs for food, medical care, and household furnishings rose. Chicago Fed President Austan Goolsbee described the reading as "another distressing report, borderline disturbing."
Federal Reserve officials have signaled a potential for aggressive monetary policy to combat inflation. Governor Christopher Waller suggested support for a 50-basis-point hike in December, a position echoed by Dallas Fed President Lorie Logan. These possibilities have led traders to worry about a larger-than-expected interest rate hike at the Fed's next meeting.
In other market activity, SoftBank shares fell as much as 8% in Tokyo after the investment giant reported a loss of more than $7 billion for the fiscal second quarter. Meanwhile, Brent crude oil hovered around $92 a barrel following a significant decline earlier in the week.
