Berliner Boersenzeitung - Investors turn cautious ahead of tech results, Fed update on rates

Share prices of technology firms surged earlier in the day in Asia. Blockbuster earnings from the South Korean chip giant SK hynix boosted optimism there in the AI trade ahead of results from Wall Street titans Microsoft and Alphabet following the closing bell.

That optimism initially carried over into Wall Street trading, but the tech-heavy Nasdaq Composite dipped into the red during morning trading.

Investors also awaited the US Federal Reserve's decision on interest rates and the accompanying statements for indications of a potential increase next month to cool inflation in the world's biggest economy.

Oil prices climbed higher amid worries of renewed fighting between the United States and Iran.

The main international contract, Brent North Sea crude, rose more than two percent to trade above $116 a barrel.

The benchmark US contract, WTI, rose 3.5 percent to above $103 per barrel.

"Higher oil prices continue to turn the screw on the global economy, casting a long shadow over the outlook for the rest of the year and beyond," said market analyst Chris Beauchamp at trading platform IG.

European stock markets reversed earlier losses to end the day flat or with small gains.

London added less than a tenth of a percentage point after the Labour government under Prime Minister Andy Burnham unveiled its first budget.

Asian stock markets mostly charged higher thanks to AI-linked stocks.

SK hynix, which has been at the forefront of the chip boom, revealed Wednesday that its third-quarter operating profit soared 632 percent to $62.8 billion thanks to explosive demand for its advanced semiconductors.

Shares in SK hynix soared almost 11 percent Wednesday and its hometown rival Samsung, which reports its earnings Thursday, added nine percent.

That pushed Seoul's Kospi index up more than six percent.

The report added to optimism surrounding the sector after Anthropic, the creator of Claude AI, said Monday that its first-half revenue surged about 1,300 percent and flagged heavy capital spending ahead, fuelling enthusiasm ahead of an expected IPO next month.

Shares in Google-parent Alphabet were up 0.9 percent as investors positioned ahead of the release of the company's third quarter results, but those in Microsoft slid 0.6 percent.

"Tonight's tech earnings have the capability to drive continued gains for tech stocks even as oil prices rise, though it is going to be a tough sell," said IG's Beauchamp.

AI stocks took a beating earlier this month over worries about the massive investments and debt levels in the sector, but then welcomed Anthropic's IPO.

Beauchamp said the market seemed to be worried about AI firms spending too much and too little.

"Caught between these two poles, tech CEOs find themselves having to chart a very tricky course tonight," he added.

Also coming up on Thursday are earnings results from Amazon, Apple and Intel, which could shape investor optimism on artificial intelligence amid the huge spending in the sector.

Investors are also watching the Fed, which "is set to hold rates steady but could signal the path to more hikes" that could weigh on corporate profits and growth, said Neil Wilson, investor strategist at Saxo UK.

- Key figures at around 1630 GMT -

New York - Dow: UP 0.3 percent at 52,515.65 points

New York - S&P 500: UP 0.2 percent at 7,738.11

New York - Nasdaq Composite: FLAT at 26,470.21

London - FTSE 100: UP less than 0.1 percent at 10,694.50 (close)

Paris - CAC 40: FLAT at 7,886.96 (close)

Frankfurt - DAX: UP 0.4 percent at 25,704.02 (close)

Tokyo - Nikkei 225: UP 1.1 percent at 63,954.19 (close)

Seoul - Kospi: UP 6.6 percent at 6,012.44 (close)

Hong Kong - Hang Seng Index: UP 0.2 percent at 23,094.83 (close)

Shanghai - Composite: UP 0.9 percent at 3,681.47 (close)

Brent North Sea crude: UP 1. percent at $115. per barrel

West Texas Intermediate: UP 1. percent at $101. per barrel

Euro/dollar: UP at $1.1151 from $1.1138 on Tuesday

Pound/dollar: UP at $1.3313 from $1.3316

Dollar/yen: UP at 158.23 yen from 157.90 yen

Euro/pound: UP at 83.75 pence from 83.64 pence

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(H.Schneide--BBZ)