According to Bloomberg, investors are beginning to reassess the significant expenditures on artificial intelligence (AI), recognizing that it currently represents more of a cost than a revenue generator. This shift in perception has influenced various market movements, including the yen's extended gains on Thursday, which saw it rally over 1% to its strongest level against the US dollar since May. The yen's rise is attributed to the potential squeeze on yen short positions, a popular strategy in recent years, as noted by Saxo Capital Markets' head of FX strategy.

In other developments across Asia, upcoming data releases include South Korea's gross domestic product, Japan's services producer prices for June, and Hong Kong's trade figures for June. Additionally, Singapore's central bank is expected to maintain its tight monetary policy settings. The tech sector, which had driven the stock rally for most of 2024, faced a downturn as traders shifted their focus from megacap stocks to other lagging market segments. This rotation was driven by bets on Federal Reserve rate cuts and concerns about the profitability of AI investments.

The tech sector's challenges are not limited to earnings shortfalls but are also impacted by a broader market rotation that began with the June Consumer Price Index (CPI) report, according to Vital Knowledge. The decline in tech stock valuations has led to discussions about potential dip buying, although the earnings season is still in its early stages. Both the Nasdaq 100 and the S&P 500 benchmarks have breached levels that trigger selling signals for commodity trading advisers (CTAs), based on models from Goldman Sachs Group Inc.'s trading desk. Should the market continue to decline, CTAs could unwind $32.9 billion of global stocks, with $7.9 billion potentially flowing out of the US market. Even if the market stabilizes, CTAs are expected to sell $902 million of US stocks.

In the commodities market, oil prices rose, recovering from a series of losses after a government report indicated that US crude inventories had fallen to their lowest levels since February. Gold prices remained steady early Thursday following a 0.5% drop in the previous session.