Stocks stumbled across much of Asia on Monday, extending a nervous stretch for global markets. Investors are bracing for a week crowded with Big Tech earnings, central bank decisions and fresh inflation data.
Wall Street’s wobbly week
The mood was set by Friday’s session in New York. The S&P 500 fell 0.5%, its second straight weekly decline, while the Dow Jones Industrial Average dropped 1.2% and the Nasdaq slipped 0.2%. Industrial names were among the weakest, with Caterpillar down 2.4%.
American Express lost 3.7% even though it reported profits ahead of forecasts. The company also announced its first significant job cuts in roughly a decade. Chip and AI-linked shares offered some relief, with Micron, Intel, Microsoft and AMD all finishing higher.
Futures edged up on Sunday evening, with S&P 500 contracts near 7,669. Traders described the rebound as tentative after two weeks of technology-led losses.
Asia follows lower
Seoul’s KOSPI fell 1.45% to close at 5,469.59, with foreign investors selling heavily ahead of earnings from Samsung Electronics and SK hynix. Tokyo and Shanghai also traded lower in early dealings, while Hong Kong’s Hang Seng edged up.
In India, the Sensex and Nifty opened in the red and deepened their losses through the morning. The Sensex was down about 500 points and the Nifty below 22,450, with technology shares and elevated crude oil weighing on sentiment.
A week of proof
The earnings calendar is the main event. Microsoft, Alphabet and Amazon are all due to report, and each is closely tied to the artificial-intelligence build-out that has driven so much of the market’s gains. Stephen Innes of SPI Asset Management described the week as “less about broad conviction and more about proof.”
Put simply, investors want to know whether the billions being poured into computing capacity will turn into lasting profits. Many AI-linked companies have borrowed to fund that spending, and high interest rates make those loans more expensive. That is one reason the shares have been hit by waves of selling whenever doubts about valuations resurface.
Oil and the Fed keep the pressure on
Brent crude stayed above $110 a barrel on Monday after closing Friday at $116.72, a six-month high. The war involving the United States and Iran has cut supply and kept inflation at the centre of the market debate.
The Federal Reserve ends its meeting on Wednesday. Traders expect rates to be held, but they lean heavily toward another increase in December. The personal consumption expenditures index, due this week, is forecast to show US inflation running at about 3.7%.
Elsewhere on the corporate calendar, Verizon and Welltower are among the companies reporting on Monday. Several other large US names follow through the week.
What it means for investors
The tension is easy to describe and hard to resolve. Strong earnings could steady shares, but rising yields and expensive oil raise the bar for companies trading at high valuations. Investors who are comfortable with volatility may see the pullback as an opportunity, while others may prefer to wait for the Fed and the earnings to land. Nothing here is investment advice, and anyone making decisions should consider their own circumstances.
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