Asian stocks are becoming increasingly cautious ahead of earnings season and are closely watching the impact of the start of the US earnings season and interest-rate outlook. With the Korean market declining and inflation indicators in Europe and the US in focus, investor sentiment is at a pivotal point.
Asian stocks opened trading cautiously ahead of earnings season. With Japan closed for a holiday, the Korean market fell 1.1%, while the MSCI Asia Pacific Index was nearly flat.
The US earnings season is expected to officially begin on 13 October, with earnings at S&P 500 companies forecast to increase by more than 30% in the third quarter of 2026, driven mainly by strength in technology.
An economist at AMP noted that investors are seeking higher yields to finance massive lending to the AI sector. The focus will be on how rising borrowing costs and widening yield spreads offset AI-related earnings.
The market is being affected by uncertainty surrounding crude oil and interest-rate trends in the US. US Treasury yields remain elevated, and market caution is rising ahead of the release of indicators including the CPI, PPI and retail sales.