Asia Markets Slide as AI Stocks Plunge Amid Call for Development Slowdown

Asian stock markets declined on Monday as AI-linked shares slid due to calls for a slowdown in development from OpenAI and Anthropic leaders. The slump was also attributed to supply concerns in the Middle East, which caused oil prices to rise nearly 3%.

The Brent crude price climbed to $107.18 per barrel, while US crude rose 2.6% to $102.62 per barrel. Analysts fear that oil prices could remain elevated due to shipping disruptions through the Strait of Hormuz and the Bab el-Mandeb.

Investors are bracing for potential interest rate hikes in both the United States and Japan this week. The US Federal Reserve is expected to increase rates by 25 basis points on Wednesday, with a further hike anticipated in December. The Bank of Japan may also raise its cash rate by a quarter point on Friday.

Ben Snider, chief US equity strategist at Goldman Sachs, said that strong corporate earnings should support Wall Street even if borrowing costs rise. However, he noted that equities typically struggle when the Fed starts to hike rates, but have historically performed well in the months following the first hike.