Brent Crude Tops $111 as AI Stock Slide Drags Markets From Asia to Wall Street

Brent crude climbed 2.6% on Thursday to reach $111.66 a barrel, a five-month high, while a slide in artificial intelligence-linked shares pulled equity markets lower across Asia, and then in New York.

The combination of rising energy costs and falling technology valuations hit investors from two directions at once, according to Decrypt, with losses spreading from Seoul and Tokyo to Hong Kong, mainland China and Wall Street.

A broad retreat led by technology

By mid-morning in New York, the tech-heavy Nasdaq had fallen 1.5%, while the S&P 500, which tracks 500 of the largest listed US companies, was down 0.8%.

Nvidia, the most valuable US company by market capitalisation, lost 2.3%. Because of its size, the chipmaker carries a heavy weighting in the S&P 500, which means its moves feed directly into the index funds held in many retirement savings accounts. A fall in one stock of that scale is therefore felt well beyond the circle of investors who deliberately chose to back AI.

Several other companies tied to the AI build-out fell further. CoreWeave, which borrowed to acquire Nvidia chips that it rents to customers through the cloud, dropped 3.8% amid concerns over its debt load. Meta fell 5.8% after reporting profit below forecasts, and Lam Research, which makes equipment used in chip manufacturing, slid 7.7% after issuing profit guidance slightly under analysts' estimates.

Taken together, the moves touched almost every layer of the AI supply chain: the chip designer, a chip equipment supplier, a debt-financed provider of computing capacity and one of the largest corporate spenders on the technology.

Asian markets take the heavier hit

The sell-off was sharper in Asia. South Korea's benchmark Kospi fell 3.52% to 5,533.77, reversing a rebound in the previous session. In Tokyo the Nikkei 225 shed 2.65%, while the Hang Seng in Hong Kong declined by 3.03%.

In mainland China, the CSI 300 index of 300 major Shanghai- and Shenzhen-listed companies slipped into bear market territory, the conventional label for a decline of 20% or more from a recent high.

South Korea has been at the centre of recent volatility. On 15 October the Kospi plunged 7.57% in a single session, a day local media called "Black Thursday". That fall triggered a circuit breaker, an automatic halt in trading designed to give markets time to absorb news and slow panic selling. The index remains more than 40% below its June peak.

Asian markets with large concentrations of semiconductor and hardware manufacturers are particularly exposed to shifts in sentiment about AI spending, since their earnings depend heavily on orders from the companies building data centres.

Oil adds a second source of pressure

The rise in Brent matters both for markets and for households. Higher crude prices raise costs for businesses and consumers, and can feed into broader inflation readings that central banks watch closely.

The effect is already visible at the pump. Gasoline prices rose 9.1% in September alone, Decrypt reported, meaning the same energy shock unsettling equity markets has begun to reach ordinary consumers.

For investors, that creates an uncomfortable mix. Falling technology shares reduce portfolio values, while rising fuel costs squeeze disposable income and make it harder for inflation to ease. Either factor alone would weigh on sentiment; arriving together, they reinforce one another.

Bubble warnings and the rate outlook

The slide followed fresh scepticism about AI valuations from a prominent figure in finance. On Tuesday, Citadel founder Ken Griffin said investors are "almost certainly" in an AI bubble.

Griffin compared AI chips to airline seats: assets that are expensive to acquire but cheap to operate once in place, so that prices can collapse when supply outstrips demand. The analogy points to a familiar risk in capital-intensive industries, where a rush to build capacity can leave providers competing on price once the initial scarcity fades.

He did not advise investors to sell. Even so, his view stands out against a market that has been persistently optimistic about AI since ChatGPT arrived in 2023, as Decrypt noted.

Griffin's argument also bears on companies such as CoreWeave, whose business model rests on financing chip purchases and then renting out capacity. If rental prices for computing power were to fall sharply, the debt taken on to buy that hardware could become harder to service, which helps explain why investors focused on its balance sheet on Thursday.

Monetary policy is a further concern. The Federal Reserve's next decision is due on 28 October, with markets pricing in roughly a 15% probability of another rate rise. A December increase is still widely expected.

Some of that outlook may already be reflected in asset prices. But higher interest rates raise the cost of borrowing and reduce the present value of future earnings, a dynamic that typically hits highly valued growth stocks, including many in technology, harder than the wider market.

Counterpoints and uncertainties

There are limits to what a single day's trading reveals. Several of Thursday's sharpest falls were tied to company-specific news, including Meta's profit miss and Lam Research's guidance, rather than a uniform verdict on AI. Lam Research's forecast was described as only slightly below estimates, suggesting the reaction partly reflected how much good news had been expected.

The decline in the major US indices was also more modest than in Asia. A 0.8% drop in the S&P 500 by mid-morning is notable but far from the scale of the Kospi's 15 October collapse.

Griffin, for his part, framed his warning as an assessment rather than a call to exit the market. Bubble warnings can prove correct over the long term while having little predictive value for timing, and markets can continue rising for extended periods despite such concerns.

On oil, a five-month high reflects a meaningful move, but the source does not set out what has driven the latest rise, leaving open how durable it may be.

What to watch next

A cluster of US data and policy events over the coming weeks will test whether Thursday's moves deepen or fade:

• 28 October: the Federal Reserve's rate decision, with a hike seen as a minority possibility
• 29 October: core PCE inflation figures, which exclude food and energy prices
• 6 November: October payrolls data

The core PCE reading will be watched for signs of whether price pressures are broadening, even though it strips out the energy costs that have driven recent headlines. Payrolls will offer a view of labour market strength, a key input for the Fed's December decision.

Investors will also be watching Brent for signs of whether its climb continues, and South Korea's Kospi for evidence that the volatility seen since mid-October is subsiding. For AI-linked stocks, the question is whether the latest round of earnings disappointments and bubble talk marks a pause in a long rally or the start of a more sustained reassessment.