Asian Markets Mixed as Nvidia Slump Weighs on Wall Street, AI Job Cuts Stir Investor Debate

BY COMFORT OGBONNA

Shares were mixed across Asia on Friday after a sharp sell-off in U.S. technology stocks, led by a steep decline in Nvidia, dragged Wall Street lower in the previous session. The turbulence reflected growing investor sensitivity to the sustainability of the artificial intelligence boom and rising concerns about how AI-driven efficiency could reshape corporate America.

U.S. futures also edged lower as traders digested comments from Jack Dorsey, the chief executive of Block, who said the payments company would lay off roughly 40% of its workforce as it pivots toward labor-saving artificial intelligence tools. His remarks reignited debate about how aggressively companies may adopt AI to cut costs and streamline operations.

In Japan, Tokyo’s Nikkei 225 edged up 0.1% to 58,810.03, showing relative resilience despite weakness in U.S. tech shares. Hong Kong’s Hang Seng climbed 0.8% to 26,578.03, buoyed by gains in select technology and financial stocks, while the Shanghai Composite slipped 0.3% to 4,139.53 as mainland investors locked in recent gains.

South Korea’s Kospi fell 0.6% to 6,288.40, reflecting profit-taking after a strong run earlier in the month. In Australia, the S&P/ASX 200 rose 0.1% to 9,184.10, while India’s Sensex declined 0.4% amid cautious sentiment.

Futures for the S&P 500 slipped 0.2%, and futures for the Dow Jones Industrial Average fell 0.4%, pointing to a subdued start on Wall Street.

On Thursday, the S&P 500 dropped 0.5% to 6,908.86. The Dow Jones Industrial Average managed a fractional gain of less than 0.1% to close at 49,499.20, while the Nasdaq Composite tumbled 1.2% to 22,878.38, weighed down by technology shares.

A fresh report showed that applications for U.S. unemployment benefits ticked higher last week, though the increase was in line with economists’ forecasts and remained historically low. The data suggested that while cracks may be forming in parts of the labor market, overall conditions remain relatively stable for now.

Nvidia, whose advanced chips power much of the global AI surge, delivered another quarter of eye-popping profit growth that surpassed analysts’ expectations. Its revenue forecast for the current quarter also exceeded Wall Street estimates. Yet even that was not enough to satisfy investors accustomed to blockbuster surprises. Shares sank 5.5%, marking the company’s worst single-day decline since April. The reaction underscored how elevated expectations have become for companies at the heart of the AI revolution.

Meanwhile, Block’s stock surged after Dorsey revealed sweeping layoffs affecting about 4,000 of its 10,000 employees. Shares had already gained 5% during regular trading on stronger-than-expected earnings and then jumped more than 20% in after-hours trading. Dorsey told shareholders that the company would be “significantly more valuable as a smaller, faster, intelligence-native company,” signaling a deep commitment to restructuring around AI capabilities.

Market analysts said the move may represent a turning point. For years, executives have discussed the potential for artificial intelligence to gradually reduce headcount. Dorsey’s announcement provided a high-profile example of a CEO openly attributing major workforce reductions to AI-driven efficiency gains.

Despite Nvidia’s sharp decline, market breadth on Thursday was positive, with roughly seven stocks in the S&P 500 rising for every three that fell. Among the gainers was Salesforce, which climbed 4% after reporting stronger-than-expected quarterly profits. The divergence highlighted how investors are rewarding companies that demonstrate tangible returns from technology investments while punishing those perceived as vulnerable to disruption.

Across industries, from trucking logistics to financial services, investors are increasingly scrutinizing business models that may be exposed to automation or displacement by AI tools. The market’s recent volatility reflects both optimism about productivity gains and anxiety about structural change.

In media and entertainment, Netflix jumped 9.2% in after-hours trading after withdrawing its bid to acquire the studio and streaming assets of Warner Bros. Discovery. The move followed the board’s announcement that an offer from Paramount was superior. Netflix said the revised terms would make the deal “no longer financially attractive.” Warner Bros. Discovery shares edged down 0.3% after the company reported a $252 million fourth-quarter loss, underscoring ongoing challenges in the traditional media sector.

In energy markets, U.S. benchmark crude gained 43 cents to $65.64 per barrel in early Friday trading. Oil prices have been volatile as the United States and Iran continue indirect talks over Tehran’s nuclear program. A diplomatic breakthrough could reduce the risk of conflict and ease concerns about supply disruptions in the Middle East, while failure could heighten geopolitical tensions. U.S. crude briefly fell as low as $63.60 on Thursday before rebounding.

Brent crude, the international benchmark, rose 27 cents to $71.11 per barrel.

In currency trading, the U.S. dollar slipped to 155.80 Japanese yen from 156.13 yen. The euro strengthened to $1.1810 from $1.1796, reflecting modest shifts in global risk sentiment as investors navigated a complex mix of corporate earnings, technological transformation, and geopolitical uncertainty.