Asian equity markets opened the week on a mixed note, with technology shares pulling back amid growing concerns over the sustainability of the AI‑driven rally. In New York, major U.S. indices rose over 1% early in the day before turning lower in the afternoon. The decline was led by Oracle, which fell 8.6% after announcing a $20 billion capital raise through shares and bonds. Marvel Technology slid 13% after it agreed to buy Lumentum for $115 billion, a deal that sent Lumentum’s shares down 18%. Intel also slipped 8%, extending a 29% drop that began on Friday.
Across the globe, the Nasdaq posted its largest retreat in four months, underscoring the volatility that investors are feeling around AI‑related stocks. The AI lab Anthropic released an updated S‑1 filing showing a 47% sequential rise in revenue for its latest quarter, a figure that has added to the debate over whether AI demand is still expanding or beginning to plateau.
Why It Matters
These moves reflect a broader shift in investor sentiment. Goldman Sachs analysts now expect capital spending by hyperscalers to nearly double to $800 billion this year and climb to $1.2 trillion in 2027. At the same time, they see S&P 500 earnings‑per‑share growth slowing to 18% next year from nearly 30% in 2026. Understanding these metrics helps investors gauge whether the current AI hype is still a growth engine or a bubble waiting to burst.
Oracle shares fell 8.6% after a $20 billion capital raise plan.
Marvel Technology dropped 13% on a $115 billion Lumentum acquisition.
Intel slid 8% after a 29% weekly decline.
Anthropic’s revenue rose 47% sequentially.
Hyperscaler capex projected at $800 billion this year, $1.2 trillion in 2027.
S&P 500 EPS growth forecast 18% next year, down from ~30% in 2026.
MSCI world index at 1,115; STOXX 600 up 0.4%.
Eurozone PMI 52.7; U.S. PMI 55.5.
Brent crude fell 7% to about $105.
What Investors Should Watch
Apple’s upcoming earnings report is a key catalyst for the week. The company is expected to announce its Q4 results after the market close on Monday, and analysts are looking for signs of slower services growth amid rising AI costs. Apple forecasts slower services growth as AI costs rise could influence the broader technology sector’s valuation.
Meanwhile, the Federal Reserve and the European Central Bank’s policy decisions are on the radar. The market is also keen on the U.S. midterm elections scheduled for Tuesday, which could add further uncertainty.
What This Means for Consumers
For everyday investors, the volatility in tech stocks means that portfolio allocations may need to be re‑examined. A slowdown in AI demand could temper the growth of companies that rely heavily on AI infrastructure, potentially affecting the price of consumer electronics and cloud services. Consumers who hold stocks in these sectors should monitor earnings releases and capital‑spending announcements for signs of changing growth trajectories.
What Happens Next
The week ahead will be shaped by Apple’s earnings, central bank policy statements, and the U.S. midterm elections. If Apple reports weaker services growth, we may see a further pullback in tech shares. Conversely, a stronger-than‑expected earnings report could revive investor confidence. Market participants will also be watching the European manufacturing data and the U.S. PMI for clues about the health of the broader economy.
"The bar for performance is rising and higher volatility in the AI trade is likely to be the new normal in this stage of the cycle," said Mark Haefele, CIO at UBS Global Wealth Management.
The Dow Jones Industrial Average climbed on Tuesday while AI‑related shares steadied, boosted by falling oil prices and optimism over a possible US‑Iran peace deal.
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