Global stock markets began November on edge. A technology selloff that erupted on Wall Street late last week rippled through Asian trading floors on Monday, even as US futures pointed to a cautious rebound. The unease centres on one question: will the enormous sums being poured into artificial intelligence deliver the returns investors have been promised?
A rout that began with chipmakers
Friday’s damage was concentrated in semiconductors. Intel plunged almost 29% in a single session, and the Philadelphia Semiconductor Index fell 7.2%, its biggest one-day drop since June. The Dow Jones Industrial Average lost 1.09%, the S&P 500 shed 1.82% and the Nasdaq Composite dropped 2.86%. The Nasdaq 100 briefly slipped into correction territory, and the session was the Nasdaq’s worst since June.
The trigger was a run of earnings that sharpened worries about the cost of the AI build-out. Amazon kept its 2026 capital spending outlook at around $220 billion, much of it tied to AI infrastructure. Three of the four largest cloud providers posted negative free cash flow in the September quarter, and ServiceNow sank a record 31% after a weak sales forecast.
Asia absorbs the shock
Asian markets felt the aftershocks almost immediately. Japan’s Nikkei 225 was down 0.7% in the morning, with chip-related names such as Ibiden and Sumco leading the decline. The index ended the day only modestly lower, off 0.3% at 63,081.86. Kioxia, the Japanese memory-chip maker, issued a profit outlook well below expectations, and its US-listed shares tumbled 17
In South Korea, Samsung Electronics and SK Hynix each fell about 4% in premarket trading. Analysts note that both companies rely heavily on demand for high-bandwidth memory, which in turn depends on the capital spending of America’s largest technology firms. Foreign investors also pulled money out of Taiwanese stocks at a record pace in October.
India offered a brighter picture. The Sensex jumped more than 900 points in early trade as crude prices fell and global signals improved.
Futures edge higher, but breadth tells a subtler story
By early Monday, US markets looked set for a calmer start. Nasdaq 100 futures were up 0.84%, S&P 500 futures 0.43% and Dow futures 0.29%.
The wider picture is more nuanced than the headline losses suggest. Nine of the 11 S&P 500 sectors gained at least 1% last week, a pattern not seen in any down week for the index since at least 1999. Since October 6, the biggest AI and chip stocks have lost roughly $5 trillion in market value, while the other 625 large US stocks tracked in one tally added about $1.3 trillion. That looks more like a rotation than a stampede for the exits. Mike Dickson of Horizon said investors were finding return potential in other kinds of stocks instead of running for cover.
A crowded calendar
The week offers little room for complacency. Apple reports after the closing bell on Monday. Palantir, AMD, Qualcomm, Pfizer, McDonald’s and Uber are also due to report.
Politics adds another layer. The US midterm elections take place on November 3, and the October jobs report arrives on November 6. Dickson cautioned that stocks have historically stayed steady regardless of which party controls Congress. The jobs figures matter because they could shape the Federal Reserve’s next move. Markets are pricing roughly an 80% chance of a rate hike at the December meeting.
Earnings, so far, have not been the problem. Of the roughly 60% of S&P 500 companies that have reported third-quarter results, more than 80% beat estimates. The concern lies elsewhere: the cash being spent to stay ahead in AI.
What it means for investors
Monday’s rebound in futures offers some relief, but few strategists expect the debate over AI spending to fade quickly. Apple’s results and the jobs report will test whether confidence in large-cap technology can recover. Much of the market’s direction in the coming days may hinge on whether investors decide last week’s selling was an overdue correction or the start of something deeper.
Summary: Chip stocks fell across Asia on Monday after Wall Street’s worst session for tech since June, driven by doubts over AI spending. US futures pointed higher, but earnings from Apple, the midterm elections and Friday’s jobs report will test the rebound.
