London stocks are expected to open lower on Thursday as renewed concerns over artificial intelligence investment trigger heavy selling across Asian technology markets, while rising oil prices add to inflation fears ahead of a busy day of UK corporate earnings.
Futures indicated the FTSE 100 would open around 0.4% lower at 10,743, following Wednesday’s modest 0.2% gain, which saw the blue-chip index close at 10,752.88.
Wall Street finished higher overnight, supported by positive corporate earnings, with the Nasdaq Composite gaining 1.1%, the Dow Jones Industrial Average rising 0.7% and the S&P 500 advancing 0.6%.
However, sentiment deteriorated across Asian markets following earnings updates from Meta Platforms and Tesla, which reignited concerns over the cost and profitability of artificial intelligence investment.
Japan’s Nikkei 225 fell 2.3%, South Korea’s Kospi dropped 3.8% and Hong Kong’s Hang Seng declined 3.1% in later trading. China’s Shanghai Composite lost 1.6%, while Australia’s S&P/ASX 200 slipped 0.4%.
Semiconductor-related companies suffered some of the steepest losses, with SK Hynix falling 6.3% and Samsung Electronics declining 4.7% in Seoul.
In Tokyo, chip equipment manufacturer Tokyo Electron dropped 5.8%, while technology investment group SoftBank lost 5.6%.
The sell-off followed fresh concerns about the substantial infrastructure and computing expenditure required to support the expanding AI industry.
Meta Platforms gained 2.2% in after-hours trading following its third-quarter results, although management warned that the costs of delivering AI services would rise as adoption increases.
Chief Financial Officer Susan Li said Meta sees several potential revenue opportunities for its Muse AI agent, including subscriptions and services aimed at small businesses.
The company estimates that at least 500 million self-identified small businesses use Meta’s applications to connect with customers and generate revenue, creating a potentially substantial market for AI-powered commercial services.
However, Meta acknowledged that expanding Muse’s user base would require considerable computing investment, adding to investor concerns about the financial demands of scaling AI products.
Tesla shares fell 3.3% in extended trading after reporting third-quarter revenue of $28.05 billion, broadly unchanged from $28.10 billion a year earlier.
Net income attributable to Tesla declined 43% to $787 million from $1.37 billion, highlighting pressure on profitability despite the company’s continued investment in technology and future products.
SPI Asset Management analyst Stephen Innes said the combination of higher AI operating costs and changing investment expectations had undermined confidence following Wall Street’s earlier gains.
Meanwhile, Brent crude climbed to $111.24 a barrel, compared with $109.14 at Wednesday’s London close, renewing concerns about the impact of elevated energy prices on inflation and economic growth.
Gold declined to $4,070.23 an ounce from $4,139.04, while US Treasury yields eased slightly, with the benchmark 10-year yield falling to 5.09%.
In currency markets, sterling strengthened to $1.3398 against the dollar, compared with $1.3389 on Wednesday, although it weakened slightly against the euro to €1.1913.
The pound had reached €1.1939 during Wednesday’s session, its strongest level against the single currency since May 2025.
Thursday brings a busy UK corporate reporting calendar, with third-quarter results from Barclays and half-year figures from J Sainsbury.
Trading updates are also expected from London Stock Exchange Group, Rentokil Initial, InterContinental Hotels Group and RELX, providing insight into financial services, consumer spending and international business activity.
The global economic calendar includes US initial jobless claims figures and eurozone consumer confidence data, both of which could influence expectations for economic growth and interest rates.
The FTSE 100 faces a cautious opening as volatility returns to global technology markets, with investors balancing the potential benefits of AI investment against rising operating costs, weaker profitability and persistent energy-driven inflation pressures.
Attention will now turn to the latest UK corporate earnings and whether London’s relatively limited exposure to major technology companies can once again provide some protection against the wider AI sell-off.
