AI Job Cuts Spark Market Concerns as Asian Stocks Show Mixed Results

Asian markets displayed varied performance following Wall Street's decline driven by Nvidia's stock drop. Block CEO Jack Dorsey's announcement to eliminate 40% of the company's workforce due to artificial intelligence automation has intensified investor concerns about AI's impact on employment.

Markets across Asia showed varied results Friday morning following a downturn on Wall Street, where technology giant Nvidia experienced its steepest decline since spring.

Investor attention centered on Block CEO Jack Dorsey’s announcement regarding his company’s plan to eliminate 4,000 positions—representing 40% of its total workforce—due to advances in artificial intelligence technology that reduce the need for human labor.

Japan’s Nikkei 225 climbed slightly by 0.1% to reach 58,810.03, while Hong Kong’s Hang Seng saw stronger gains of 0.8% to close at 26,578.03. However, Shanghai’s Composite index declined 0.3% to 4,139.53.

South Korea’s Kospi dropped 0.6% to 6,288.40 as investors took profits from recent market advances. Australia’s S&P/ASX 200 managed a modest 0.1% increase to 9,184.10, while India’s Sensex fell 0.4%.

American market futures pointed to continued weakness, with S&P 500 futures down 0.2% and Dow Jones Industrial Average futures declining 0.4%.

Thursday’s trading session saw the S&P 500 decrease 0.5% to 6,908.86. The Dow managed a minimal gain of less than 0.1% to reach 49,499.20, while the technology-heavy Nasdaq composite dropped 1.2% to 22,878.38.

Employment data revealed that weekly jobless claims increased slightly but remained within economists’ forecasts and at historically low levels.

Nvidia, the chip manufacturer at the center of the artificial intelligence revolution, delivered exceptional quarterly results that exceeded analyst predictions. The company’s revenue projections for the upcoming quarter also surpassed Wall Street expectations.

However, such outstanding results have become routine for Nvidia, diminishing their market impact. The stock plummeted 5.5%, marking its largest single-day loss since April.

Block’s stock, formerly known as Square, initially rose 5% Thursday before earnings were released, then surged more than 20% in after-hours trading following Dorsey’s workforce reduction announcement.

“We believe Block will be signficantly more valuable as a smaller, faster, intelligence-native company. Everything we do from here is in service of that,” Dorsey wrote in a letter to shareholders.

According to Stephen Innes of SPI Asset Management, Dorsey “just did what most CEOs have only whispered about in boardrooms.”

“For years we’ve debated whether AI would dent jobs at the margin. Now we have a public case study where the CEO explicitly says intelligence tools have changed what it means to build and run a company,” he said.

Despite Nvidia’s struggles, the broader market showed resilience with seven S&P 500 stocks advancing for every three that declined. Salesforce contributed to the positive momentum, gaining 4% after reporting quarterly profits that beat analyst expectations.

Various industries, from transportation logistics to financial services, have faced investor skepticism over concerns that artificial intelligence could disrupt or eliminate their business models entirely.

In entertainment news, Netflix shares jumped 9.2% in extended trading after the streaming company withdrew its acquisition bid for Warner Bros. Discovery’s studio and streaming operations. This development positions Skydance-owned Paramount to potentially acquire its Hollywood competitor.

Netflix stated that the cost required to purchase Warner after its board declared Paramount’s proposal superior would make the transaction “no longer financially attractive.”

Warner Bros. shares edged down 0.3% Thursday after the media company reported a $252 million fourth-quarter loss.

Oil markets saw early Friday gains, with U.S. benchmark crude rising 43 cents to $65.64 per barrel. Crude prices have experienced volatility amid indirect negotiations between the United States and Iran regarding Iran’s nuclear program. Thursday saw U.S. crude briefly drop to $63.60 before recovering.

A diplomatic resolution would reduce military tensions that could potentially disrupt global oil supplies and drive prices higher. American military presence in the Middle East has reached its highest level in decades, increasing geopolitical stakes.

International benchmark Brent crude gained 27 cents early Friday to $71.11 per barrel.

Currency markets showed the U.S. dollar weakening to 155.80 Japanese yen from 156.13 yen. The euro strengthened to $1.1810 from $1.1796.