Utah Daily Newswire

Global Markets Diverge as Fed Rate Cut Boosts Seoul, While AI Spending Concerns Weigh on Wall Street

Global Markets Diverge as Fed Rate Cut Boosts Seoul, While AI Spending Concerns Weigh on Wall Street

Global markets presented a mixed picture on Thursday, as a recent U.S. Federal Reserve rate cut fueled a strong rally in South Korea, while Wall Street futures pointed to a lower open amid rising concerns over the high cost of artificial intelligence development.

U.S. futures contracts suggested a dip at the opening bell, with the Dow Jones expected to fall 0.26%, the S&P 500 down 0.02%, and the Nasdaq flat.

Big Tech Sees Volatility on AI Spending

Investor focus zeroed in on the massive capital expenditures required for AI dominance.

Microsoft (MSFT) shares fell 2.8% in pre-market trading. Although the company’s Azure cloud platform reported rapid growth and quarterly revenue beat market expectations, Wall Street reacted negatively to infrastructure spending on artificial intelligence that surpassed forecasts. The heavy investment stoked fears about the associated costs of maintaining that growth.

In contrast, Alphabet (GOOGL) surged 7.5% in early trading. The Google parent company posted quarterly revenue that topped Wall Street estimates, driven by solid growth in both its advertising and cloud computing divisions.

Meta (META), however, tumbled 7.4% before the bell. The company announced Wednesday that it anticipates “significantly higher” capital expenditures next year to fund its major push into AI, including the construction of new data centers. Separately, the group also reported $16 billion in exceptional charges during the third quarter related to the sweeping U.S. tax reforms under President Donald Trump.

AI Sector Hits New Milestones

The artificial intelligence sector continued to dominate headlines. Nvidia (NVDA) became the first company in history to achieve a $5 trillion market valuation, cementing its central role in the global AI boom. In related news, President Trump stated he did not discuss Nvidia’s Blackwell chips during his meeting with Chinese President Xi Jinping in South Korea.

Meanwhile, three sources familiar with the matter reported Wednesday that OpenAI, the creator of ChatGPT, is conducting preparatory work for an initial public offering. The IPO could potentially value the firm at $1 trillion, setting the stage for one of the largest public debuts in history.

Fed Cut Lifts Seoul; US-Korea Trade Deal Finalized

Asian markets reacted positively to overnight developments. The Federal Reserve cut its key interest rates by 25 basis points—the second such reduction this year—bringing the target range to between 3.75% and 4.00%.

The Seoul stock market opened sharply higher Thursday. The benchmark Kospi index gained 42.89 points, or 1.05%, in the first 15 minutes of trading to reach 4,124.04. Market confidence was bolstered by the Fed’s move and an announcement Wednesday evening that Seoul and Washington had finalized terms of a new trade agreement covering tariffs.

U.S. markets had closed mixed the previous night, with the Dow falling 0.16% while the Nasdaq rose 0.55%. The muted reaction followed comments from Fed Chair Jerome Powell, who hinted this might be the year’s final rate cut, noting “very different opinions on the right course of action in December” and stating that another cut is “far from guaranteed.”

In Seoul, most large-cap stocks advanced. Market heavyweight Samsung Electronics gained 2.49%, and rival SK hynix rose 0.72%. Automakers surged after President Trump agreed to lower U.S. tariffs on South Korean cars and auto parts from 25% to 15%. Hyundai Motor stock jumped 6.59%, while its affiliate Kia climbed 4.84%.

Investors are now turning their attention to the summit between President Trump and Chinese President Xi Jinping, scheduled for later in the day in the South Korean port city of Busan during the APEC summit.

Other Corporate Movers on Wall Street

In other company news:

Pharmaceuticals:

  • Metsera (MTSR): Shares jumped 19% pre-market after Danish firm Novo Nordisk (NOVOb.CO) announced an unsolicited cash offer of $56.50 per share, valuing the U.S. drugmaker at $6 billion. This follows a previous $47.50 per-share offer from Pfizer (PFE) last September.

  • Eli Lilly (LLY): Raised its full-year profit and revenue forecast, citing surging demand for its GLP-1 drugs used to treat diabetes and obesity.

  • Merck (MRK): Reported a rise in third-quarter revenue, as strong growth from its cancer drug Keytruda offset declining sales of the HPV vaccine Gardasil in China.

  • Biogen (BIIB): Lowered its full-year profit guidance, expecting a $1.25 per-share impact from R&D costs associated with fourth-quarter acquisitions.

  • Cigna (CI): Beat third-quarter profit estimates, driven by strong performance in its Evernorth division, which includes its pharmacy benefit management (PBM) business.

Retail and Consumer:

  • Chipotle Mexican Grill (CMG): Shares plummeted 17.6% in pre-market trading after the fast-food chain cut its annual sales forecast for the third time this year, citing impacts from tariffs, inflation, and shifting consumer habits.

  • Starbucks (SBUX): Announced its first comparable sales increase in nearly 18 months, driven by international markets. However, the company noted its margins were impacted by the rising price of coffee.

  • Restaurant Brands (QSR): Reported third-quarter comparable sales that beat estimates, thanks to steady traffic at its Burger King and Tim Hortons chains.

Tech and Finance:

  • eBay (EBAY): The e-commerce company announced a profit forecast for the crucial holiday quarter that fell short of analyst expectations, citing persistent macroeconomic uncertainty.

  • Mastercard (MA): Is reportedly in the final stages of negotiations to acquire a financial technology startup.