Ahead of European markets opening on Wednesday, Asian stocks diverged as renewed optimism over the AI trade was offset by forecast-topping US inflation data and the prospect of a bumper interest rate hike next month.
After last week's rout, fuelled by fears that Democrats would ramp up regulation of artificial intelligence, beaten-down tech stocks have bounced this week on bargain-buying and a feeling that their fears may have been overdone.
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Sentiment was also given a boost by earnings from data centre operator CoreWeave, which said sales would come in at $13-13.3 billion (€11.6-11.9bn) this year, beating estimates.
The news soothed worries about the company's health after it suffered heavy selling last month amid speculation that it could struggle to finance its vast debt pile as borrowing costs continued to rise.
That sparked a period of panic over the tech sector as firms rely heavily on debt to fund their eye-watering AI investments.
Also lifting confidence was Anthropic's filing showing it planned to raise up to $64 billion (€57.1bn) in its upcoming initial public offering, valuing it at as much as $1.4 trillion (€1.25trn).
The maker of AI agent Claude had been expected to raise up to $100 billion (€89.2bn) in its IPO, which would have made it the largest IPO on record.
The stock market debut is being seen as a gauge of how long the AI spending boom can last.
Its filing also revealed that revenue soared to $17 billion (€15.2bn) in the third quarter, up from just $1.4 billion (€1.25bn) a year earlier.
And in another sign of the sector's health, Bloomberg reported that ChatGPT-maker OpenAI had earned $10 billion (€8.92bn) in quarterly revenue for the first time in July-September, thanks to demand for its software.
The figure marked an increase of nearly 50% from the previous three months and a near threefold jump year on year.
However, chip giant Nvidia was still in focus following the bombshell revelation of an affair between CEO Jensen Huang and a woman reportedly suspected of being a Chinese spy.
The firm is now the subject of an FBI investigation.
'No shortage of catalysts'
All three main indexes on Wall Street ended in the red on Tuesday, snapping a two-day rally, while Asian markets stuttered.
Tokyo, Seoul and Taipei – where most of Asia's leading AI-linked firms are listed – continued to rise, with Singapore and Jakarta also up.
But there were losses in Hong Kong, Shanghai, Sydney, Wellington and Manila.
Traders are also now fretting over the possibility of a bigger-than-expected interest rate hike by the Federal Reserve when it next meets in December.
US consumer prices rose 0.4% month on month in October, a slowdown from the previous month's 0.6% but more than the 0.3% forecast.
While the reading reflected a significant moderation in energy price increases, food prices shot higher, along with medical care, household furnishings and several other categories.
Chicago Fed boss Austan Goolsbee told PBS NewsHour the reading was "another distressing report, borderline disturbing".
The report came hours after Fed Governor Christopher Waller called for a swift response to inflation, suggesting he could even support a 50-basis-point hike in December.
A second Fed official, Dallas Fed President Lorie Logan, also signalled strong support for swift action to address inflation.
"Market participants continue to navigate the political implications of the Democratic sweep, and the economics of AI infrastructure," said Pepperstone's Chris Weston.
He said investors were "forced to reassess assumptions around future revenues, cash flows and funding conditions".
"Add a hotter-than-expected US (consumer price) print, a heightened focus on Anthropic's IPO, and a major buyers' strike on Nvidia, and there's no shortage of catalysts driving market price action," he added.
Oil prices edged up after sinking again on Tuesday on hopes for a US-Iran agreement to end their war and reopen the crucial Strait of Hormuz.
International benchmark Brent was hovering around $92 (€82.06) a barrel, after dropping below $90 (€80.28) for the first time since August.
Both contracts are down around 20% since the start of the month.
In company news, Japanese tech investment giant SoftBank tumbled as much as 8% in Tokyo after reporting a more than $7 billion (€6.24bn) loss in the fiscal second quarter.
