AI-linked tech firms suffered steep losses after Amazon’s quarterly report fell short of analysts’ expectations for profit and revenue, while Intel’s earnings forecast missed estimates owing to weak demand for PC processors and supply chain problems.The announcements came a day after Google parent Alphabet reported weaker revenue growth from its advertising and search businesses, while saying it would ramp up capital expenditure.Alphabet plunged more than 12%, while Amazon tanked more than 7% in after-hours trading, having lost more than 4% before the close. Intel dropped 23%. The Nasdaq finished down more than 1%.The selling continued in Asia, where South Korean chipmaker SK hynix dived more than 7% and rival Samsung lost 3%, well off their morning lows.Japanese semiconductor firm Kioxia shed more than 7%, while Advantest and SoftBank skidded nearly 6%.TSMC in Taiwan lost 1.9%.”This earnings season has been tough on AI players, with most getting punished against a backdrop of AI bubble and inflation fears,” said Anna Wu of Floodlines Research.”The concern isn’t that AI demand has already slowed. It’s that higher funding costs and credit risk could eventually force hyperscalers to slow their build-out.”The sell-off hit most broader markets in the region, with Seoul diving more than 3%, while Tokyo and Taipei shed more than 2%.There were also losses in Shanghai, Singapore, Bangkok, Jakarta and Manila, although Hong Kong, Sydney, Mumbai and Wellington rose.Paris stocks were flat as data showed that the French economy had contracted in the third quarter, compounding concerns about public finances and growing political tensions.London rose, while Frankfurt fell.Friday’s retreat was a far cry from the optimism seen earlier in the week, when SK hynix said operating profit had soared 632% and AI giant Anthropic reported a first-half revenue surge of about 1,300% in its IPO filing.Iran fears lift oilThe results have been unable to soothe investor worries about the eye-watering amounts firms are pumping into AI and when that will see a profit, while surging borrowing costs are fuelling fears over company finances.Focus is now turning to Tuesday’s US midterm elections and the impact they could have on the final two years of Donald Trump’s presidency, with some speculating that he could ramp up his war on Iran, which could send oil spiking again.”There’s been a lot of talk that once these are out of the way, the US could go all shock and awe on Iran? I’m not sure how the midterms would affect that if he loses control of both Houses,” said Michael Hewson, of MCH Market Insights.”Does the outcome matter for the markets, probably not, although a crude oil price which moves above $120 a barrel could well be another story. This remains a much bigger risk for markets than anything the US midterms might bring about.”Fears of a ramping up in US-Iran hostilities were stoked by a report in the Wall Street Journal saying Trump’s top Middle East commander had briefed him on military options for Tehran.Both main contracts climbed more than 1%, with Brent heading towards $120 a barrel for the first time since April.Bitcoin, meanwhile, tumbled around 5% to a one-month low of around $76,400 after crypto platform Binance said it had fallen victim to a major hack that had impacted more than $6 billion in funds.The world’s largest crypto exchange by daily trading volumes posted a series of sometimes contradictory messages on X, insisting that “user funds are completely safe” but also saying it would “cover all losses”.It said later on its X account for Latin America that “the total estimated impact is around $6.3 billion”.”We have worked with blockchain partners to freeze the affected assets, with ~$3 billion frozen on-chain so far,” it added.That would be four times the amount impacted in the biggest-ever cyberattack of its kind to date, which saw $1.5 billion (€1.34bn) taken in February 2025 from the Bybit platform.On currency markets, the yen strengthened against the dollar after the Bank of Japan held steady on interest rates and said inflation had topped its 2% target.