Morning Bid: AI stocks learn to fly — but ain't got wings

A look at the day ahead in European and global markets from Satoshi Sugiyama

In "Learning to Fly", Tom Petty sang that what goes up must come down. For AI-related stocks, that looks a lot less like a lyric than a trading pattern.

Tech-heavy South Korea's KOSPI shed 4% in Asia on Thursday after surging nearly 6% the previous day. Japan's Nikkei similarly slumped 1.6%, following a 3.66% jump. Taiwan's benchmark was roughly flat after a nearly 2.9% gain.

Those moves tracked losses in Wall Street peers as Elon Musk-led AI and satellite company SpaceX and U.S.-listed chipmaker Advanced Micro Devices saw their shares tumble on recurring concerns about massive AI spending.

A similar on-again, off-again theme is playing out in efforts to end the U.S. conflict with Iran. Reuters reported a proposed deal between Iran and Oman could give Tehran control over inbound traffic through the Strait of Hormuz, a crucial route for global energy supplies.

There was no immediate U.S. reaction to the proposal. And while U.S. President Donald Trump said a deal to reopen the strait was imminent, U.S. officials have repeatedly insisted they would never agree to Iran controlling access to the strait.

Oil prices traded in the $70-a-barrel range, with Brent crude futures rising 0.45% to $79.81 a barrel and U.S. crude edging 0.31% higher to $75.45 a barrel in the Asian session, with investors waiting for further developments.

Traders were also weighing the Federal Reserve's likely rate path ahead of Friday's closely watched nonfarm payrolls report.

Wednesday's ADP private employment report showed U.S. private-sector job growth slowed in July from June and missed market expectations. An Institute for Supply Management survey pointed to solid growth in the services sector, but also rising input costs that could keep inflation elevated.

Key developments that could influence markets on Thursday:

Economic events:

Germany: Industrial orders for June

United States: Jobless claims

(Reporting by Satoshi Sugiyama; Editing by Sonali Paul)