Tech stocks seem to be facing further declines, as a new round of disappointing financial reports has prompted funds to withdraw from investments in artificial intelligence ( AI ). Huge capital expenditures have raised doubts about the returns on these investments in the market.

Nasdaq 100 index futures fell 1.6%, indicating that tech stocks are still under pressure after the main Wall Street indices declined on Thursday. S&P 500 index futures fell 0.6%. Following the sell-off of AI stocks around the world on the previous trading day, Asian stock markets are also expected to open weakly, with Alphabet (the parent company of Google) recording the largest decline in history due to poor financial report performance.

On the last trading day of this month, pessimistic sentiment further intensified. Amazon tumbled 7.3% in after-hours trading due to a significant surge in its expenses, while growth in its online business slowed down. Intel also suffered a heavy loss of 23% after hours, as its revenue forecasts fell short of market expectations, mainly affected by weak demand for personal computer processors and supply chain issues.

Moomoo's market strategist, Greg Boland, stated: "The overall message is that investors need more than just the commitments from AI. Since tech stocks are valued at high levels, the market demands clearer evidence that these substantial investments will generate profits and cash flows. This has triggered a risk-aversion sentiment in the tech stock market, which has also affected the Asian markets."

The selling of tech stocks has reignited demand for U.S. Treasury bonds, and traders have reduced their expectations for a Fed interest rate hike. The trend of Australian sovereign bonds has also followed the movements of U.S. Treasury bonds. The Bloomberg Dollar Index fell by 0.1% during early trading on Friday.

Meanwhile, before the Bank of Japan announced its interest rate decision, the Japanese yen exchange rate remained stable at around 157.75 yen per US dollar. The market generally expects that the Bank of Japan will keep the benchmark interest rate unchanged on Friday, while indicating that its potential inflation rate has finally reached the target of 2%.