Asian markets slip as Alphabet earnings miss drags Wall St futures

Asian equity markets reversed earlier gains on Thursday after Alphabet reported a larger-than-expected cash burn, sending its shares down about 10 percent in after-hours trading and wiping nearly US$400 billion from its market value. The decline pushed Nasdaq futures about 1 percent lower. By contrast, Microsoft posted better-than-forecast cash flows, lifting its shares roughly 3 percent.

The Federal Reserve kept interest rates unchanged, though two committee members voted for a hike. Chair Kevin Warsh signaled confidence in the inflation outlook, prompting a rally in Treasury bonds. Market participants now await September personal consumption expenditures data, the Fed’s preferred inflation gauge.

In the region, Samsung Electronics reported a near-ninefold rise in third-quarter operating profit, driven by strong demand for AI chips, yet its shares fell more than 4 percent, pulling the KOSPI down 2.6 percent after a prior surge. MSCI’s broadest Asia-Pacific index outside Japan slipped 0.7 percent, while Japan’s Nikkei edged up 0.3 percent. Mainland China’s blue-chip stocks declined 0.9 percent, and Hong Kong’s Hang Seng rose 0.2 percent.

"The reason why Alphabet is down is because their traditional revenue service of ad generation has been impacted by the very thing which is the AI boom. So it's causing a mix of results for Google," said Jamie Hannah, deputy head of investments at VanEck.

"Both of Alphabet and Microsoft confirmed that the AI revenue generation is still solid. We saw that through the data center growth, the cloud services. So that part of the business is solid, which then flows into a lot of the information coming out of Asia with SK Hynix yesterday as well in Korea," Hannah added.

SK Hynix shares rose 1.3 percent after an 11 percent jump the day before on strong earnings. JP Morgan Asset Management strategist Kerry Craig noted that the dissenting Fed votes suggest the timing of any future hike is the key issue, and that yields are likely to stay range-bound unless policy signals shift.

The Bank of Canada raised its policy rate for the first time in more than three years, while the European Central Bank is expected to hold rates steady. In currency markets, the U.S. dollar was flat against major peers, and New Zealand’s kiwi slipped 1 percent after the Reserve Bank left rates unchanged. Brent crude fell 0.4 percent to US$114.91 a barrel following reports that U.S. Vice President JD Vance sent a letter to Iran’s security council chief to revive peace talks.