Global Markets Await Inflation Data Release

Asia-Pacific markets declined on Thursday as investors continued to rotate out of tech stocks, following a similar trend on Wall Street. The Bank of Japan is expected to raise interest rates to 0.75% on Friday, its highest level in 30 years. AI-related stocks, including Nvidia and Advanced Micro Devices, fell as Oracle's primary investor, Blue Owl Capital, pulled out from funding one of its data center projects. Japan's Nikkei 225 index lost 1.03%, while South Korea's Kospi was down 1.53%. The declines were seen across various markets, including Hong Kong and mainland China. The U.S. consumer price index reading for November is awaited, with economists expecting a 3.1% year-over-year growth in headline inflation.

Oracle's high debt levels are affecting its data center funding, with asset management firm Blue Owl Capital pulling out of a $10 billion data center project due to unfavorable debt terms. This development has raised concerns that Oracle may delay the completion of data centers for OpenAI. Oracle's shares fell 5.4% on Wednesday, contributing to a decline in major U.S. indexes. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all lost ground, with the Nasdaq experiencing its worst day in nearly a month. Despite this, Bank of America analysts believe the AI trade may still have room to run into 2026. Other news includes China's chipmakers gaining attention from investors, Warner Bros. commenting on Netflix's deal with Paramount, and the U.S. approving an $11.15 billion arms sale to Taiwan.

European stocks were slightly higher at the opening bell on Thursday as traders awaited central bank decisions, with the European Central Bank, Bank of England, Riksbank, and Norges Bank concluding monetary policy meetings. Only one bank is expected to change rates. BP's shares were closely watched after the company announced Meg O'Neill as its next CEO, replacing Murray Auchincloss. In the US, S&P 500 futures were near flat as investors awaited November inflation data. US stocks rebounded from Wednesday's losses, which were triggered by a decline in AI-related stocks after Oracle's primary investor pulled out of funding one of its data center projects.

Japanese tech stocks experienced a significant decline on Thursday, led by SoftBank Group Corp, which fell as much as 7.25%, as worries over AI infrastructure spending on Wall Street spilled over into Asian markets. The decline was triggered by a 1.81% drop in the tech-heavy Nasdaq Composite overnight, driven by losses in AI-related stocks such as Oracle, Broadcom, and Nvidia. SoftBank's stock has been volatile in recent months due to concerns over AI-related spending, despite the company's plans to invest $500 billion in AI infrastructure in the US. Other Japanese tech stocks, including Advantest, Lasertec, Renesas Electronics, and Tokyo Electron, also declined. In contrast, South Korean chipmakers Samsung Electronics and SK Hynix showed relatively modest losses or even gains. Experts attribute the vulnerability of Japanese tech stocks to worries around US tech spending, as much of the equipment for data centers and AI hardware is made in Japan.

The stock market is awaiting the release of November's consumer price index reading, which is expected to show a 3.1% year-over-year inflation growth. S&P 500 futures rose 0.1% as investors awaited the data. Micron Technology's shares jumped 7% after the company reported strong quarterly financial results and a rosy revenue forecast. Oracle's shares fell 5% after a report that its primary investor pulled out of a $10 billion Michigan data center deal. The tech sector is on pace to end 2025 with a 19% advance despite recent jitters. Coinbase announced plans to launch new investment products, including prediction markets and tokenized traditional assets.